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Old 19th May 2020, 10:19
  #1224 (permalink)  
Blackout
 
Join Date: Feb 2001
Posts: 182
https://www.asx.com.au/asxpdf/202005...52jrnl1f11.pdfSydney, May 18, 2020 -- Moody's Investors Service has today downgraded Virgin Australia Holdings Limited's Corporate Family Rating to Ca from Caa1. Concurrently, Moody's has downgraded Virgin's senior unsecured and backed senior unsecured ratings to C from Caa2, and its backed senior unsecured MTN program to (P)C from (P)Caa2.

RATIONALE:

The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The airline sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Virgin's credit profile, including its exposure to global demand for travel, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. Today's action reflects the impact on Virgin of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered.

The rating action was prompted by Virgin missing the coupon payment on 15 May 2020 of its USD425 million 8.125% 2024 bonds, after entering into voluntary administration on 21 April 2020.


So realistically, not only do they have to service their debt, they have to run a profit V2.0 from the word go...Otherwise its more debt!

Deep Pockets

Last edited by Blackout; 19th May 2020 at 12:25. Reason: Link - Point
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