Ratings updates for TAM, LAN and AMR

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