S&P affirms Azul

S&P said it affirmed its B+ global scale issuer credit and issue-level ratings on Azul SA and affirmed the brAA Brazilian national scale issuer credit rating.

The B+ issue-level rating on Azul's senior unsecured debt is the same as the issuer credit rating, reflecting a recovery rating of 4, given expectations of average recovery prospects (30%-50%; rounded estimate 40%) for unsecured creditors.

“The affirmation reflects our expectation of Azul's gradual improving credit metrics in the next few years, albeit somewhat slower than our previous forecast, supported by its fairly balanced capital structure with hedged debt principal, growth strategy that will generate higher cash flows, good operating efficiency, and ability to adjust average ticket prices during volatile industry and macroeconomic conditions,” S&P said in a news release.

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