Flash Fixed Income Report /
Brazil

S&P upgrades GOL to B from B-

    Rafael Elias
    Rafael Elias

    Director, Latin America Credit

    Tellimer Research
    14 August 2019
    Published by

    S&P upgraded Gol Linhas Aereas Inteligentes’ – the parent company of the issuer Gol Finance (GOLLBZ) – credit rating today to B from B-. The rating agency also upgraded notes issued by the company and by its fully-owned subsidiaries, according to a company press release.

    The upgrades are as follows:

    • GOL’s foreign and local currency Issuer Default Ratings (IDR) have been upgraded to B from B-, with a stable outlook
    • GOL’s unsecured notes and perpetual bonds were also upgraded to B from B-, with a stable outlook
    • GOL’s national scale rating was upgraded to brA from brBBB, with a stable outlook

    “With S&P’s latest upgrades to GOL’s national and foreign currency ratings, all three major rating agencies have now recognised the improvement in the company’s credit profile – a result of our continued focus on capacity discipline and balance sheet strengthening,” said Richard Lark, GOL’s Chief Financial Officer.

    S&P’s upgrade comes on the back of the company’s Q2 19 results, where the airline reported a strong set of results despite the grounding of their Boeing Max aircrafts (see our results note here). GOL reported its highest second quarter net revenues ever, increased the number of transported passengers and continued a favourable balance sheet management strategy.

    We have a Buy recommendation on GOLLBZ based on what we believe are attractive yields and a positive business outlook.