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Ratings updates for TAM, LAN and AMR

19-May-2011

Fitch Ratings maintained the 'BBB' foreign currency Issuer Default Rating (IDR) of LAN Airlines on Rating Watch Negative. Fitch has also affirmed LAN's national equity rating at Level 2 (Primera Clase Nivel 2).

Fitch's decision to maintain the Rating Watch Negative reflects the view that the LAN/TAM SA (TAM) transaction, if approved, would weaken the credit quality of LAN. The approval of this merger has been delayed by anti-trust authorities.

Fitch maintained the rating watch positive on TAM ratings as follows:

  • Foreign currency Issuer Default Rating (IDR) 'B+';
  • Local currency IDR at 'B+';
  • Long-term national scale rating at 'BBB+(bra)';
  • USD300 million senior unsecured note due to 2020 at 'B+/RR4';
  • USD300 million senior unsecured note due 2017 at 'B+/RR4';
  • BRL500 million debentures issuance due 2012 at 'BBB+(bra)';
  • The rating outlook is stable.

AMR Corp received a negative outlook rating from Standard & Poor’s, revised down from stable. The ratings agency reaffirmed its overall corporate credit rating of B-minus.

Shares in LAN and TAM rose 1.4% and 0.3% yesterday, while American Airlines closed 2.2% lower.

Selected American airlines' daily share price movements (% change): 18-May-2011


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