LatAm Airlines preps debt sale in US

martes 12 de mayo de 2015 11:01 GYT

By Paul Kilby

NEW YORK, May 12 (IFR) - LatAm Airlines is wrapping roadshows on Tuesday in the US ahead of a potential sale of debt securities through leads Citigroup, Deutsche Bank and JP Morgan, said a source.

The borrower is marketing a specialized type of aircraft financing called enhanced equipment trust certificates (EETCs), which have been used by foreign airlines to access the US capital markets at attractive costs.

The airline, the result of a merger between Brazil's TAM airlines and Chile's LAN airlines, received a first time Ba2 corporate family rating from Moody's in early April.

That same month, Fitch downgraded the credit to BB- from BB, citing high leverage. While leverage is high for the ratings category, Fitch expects the company to lower adjusted gross leverage to around 5x between 2015-2016, down from 6.1x in December 2014.

Moody's cited the airline's well diversified business portfolio, adequate liquidity and an operating structure that has allowed it to remain competitive. Ratings have been constrained by the company's mismatch between dollar costs and local currency revenues.

As of December 31 2014, LatAm Airlines had some US$1.5bn in cash and short-term investments, enough to cover its debt maturities this year, Moody's said. It also has access to US$210m in committed credit lines, which are subject to covenant tests and material adverse change clause, the agency said. (Reporting By Paul Kilby; Editing by Shankar Ramakrishnan)