- Issuer Default Rating (IDR) at 'BBB';
- Senior Unsecured Debt at 'BBB';
- USD600 million Unsecured Revolving Credit Facility expiring 2012 at 'BBB';
- Secured Term Loan due 2020 at 'BBB+'.
Fitch has also assigned a BBB+ rating to the carrier's USD320 million secured term loan due May-2019 and USD124 million secured term loan due July-2019. Fitch's ratings apply to approximately USD2.5 billion of outstanding notes and loans.
Fitch Ratings: "The ratings reflect LUV's solid liquidity position, its long track record of industry-leading profitability and free cash flow (FCF) generation, and management's continuing commitment to low balance sheet leverage. The revision of the Rating Outlook to Stable reflects the airline's improved margin and cash flow generation prospects for 2010 and the significant turnaround in the industry revenue environment witnessed during the first months of the economic recovery. After two years of operating challenges, when fuel price volatility and the recession-induced collapse in air travel demand pressured margins and FCF generation, LUV is delivering stronger operating results, and is well positioned from a liquidity standpoint to undertake meaningful balance sheet de-levering through the end of 2011," Company Statement, 30-Jul-2010.