MUMBAI (Thomson Financial) - Moody's Investors Service said it downgraded
JetBlue Airways Corp's. corporate family and probability of default ratings to
'Caa2' from 'Caa1' with a negative outlook citing expectations that the
difficult operating environment will cause erosion of the company's financial
metrics and that it will continue to face significant near-term cash losses.
Although fuel costs have moderated recently, they are likely to remain high
and these challenging conditions are likely to continue, particularly as the
industry enters the seasonally weak fall and winter months, and operating losses
could erode the company's liquidity profile when it faces meaningful calls on
cash for debt maturities, Moody's said.
The company has obtained a new 110 million dollar line of credit, deferred
the deliveries of 10 Embraer 190 aircraft and secured financing for all of its
Airbus A320 and its E190 aircraft deliveries.
The company is working on other initiatives to improve near term liquidity
-- an equity investment of about $300 million from Lufthansa, received $165
million net proceeds from a new convertible debt placement and raised funds from
the sale of aircraft, the ratings agency noted.
However, Moody's said these were not seen as materially improving the
company's near-term liquidity.
The negative outlook reflects Moody's expectation of continued deterioration
in JetBlue's key credit metrics such as interest coverage and leverage during
2008, due primarily to high fuel costs and a weakening economic environment.
TFN.newsdesk@thomson.com
arc/alo
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