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LATAM Airlines along with its senior secured debt has been upgraded by a notch to B+ and BB respectively by S&P. The rating action follows the sharp improvement in the airline’s credit metrics during 2023 and S&P’s expectations that they will remain in good shape over the next two years. For instance, S&P forecasts EBITDA of ~$2.7bn and free operating cash flow between $500-700mn in the next two years, resulting in an estimate of the company’s adjusted debt/ EBITDA of 2.5x-2.6x. S&P has a positive outlook on the entity, expecting it to maintain its EBITDA margins and healthy FFO to debt levels.
Its 7% 2026s traded stable at 93.4 cents on the dollar, yielding 8.89%.