13-Jul-2010 10:19 AM

GOL announces offering of senior notes; Fitch assigns BB- rating

GOL Linhas Aéreas Inteligentes announced (12-Jul-2010) that its subsidiary, Gol Finance, is offering senior notes due 2020 in an offering exempt from registration under the US Securities Act of 1933. GOL and its subsidiary, VRG Linhas Aéreas, will guarantee the notes. The notes will be senior unsecured debt obligations of GOL and are subject to optional redemption. GOL intends to use the proceeds primarily to repay existing debt maturing in the next three years. [more]

Fitch Ratings, meanwhile, assigned (12-Jul-2010) a BB- rating to GOL's proposed senior guaranteed notes due 2020. The target amount of the proposed issuance is in the range of USD200 million to USD400 million. Fitch currently rates GOL as follows:

Foreign currency and local currency issuer default ratings (IDRs) BB-;

  • USD200 million perpetual bonds BB-;
  • USD200 million of senior notes due 2017 BB-;
  • National scale rating A-(bra).

The rating outlook is "stable". [more]

Fitch Ratings: "The ratings reflect GOL's consistent improvements in cash flow generation, comfortable liquidity, and continued decline in leverage during the last several quarters. The ratings also factor-in expectations that the company will continue lowering its net leverage while maintaining an ample cash position. The company is exposed to fuel cost volatility and other industry-related risks, such as revenue volatility, high operating leverage and increasing competition. The ratings incorporate the high degree of sensitivity of GOL's operations to changes in the macroeconomic scenario. The stable outlook reflects expectations that GOL will maintain its solid market position as Brazil's second-largest airline and that the company will continue to benefit from stronger domestic demand for domestic air travel in the business and leisure segments following the recovery in Brazil's economy. Any material event that would positively or negatively alter the company's business and/or financial profile could affect the company credit quality," Company Statement, 18-Jul-2010.

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