Moody's lowers Lufthansa

Moody's Investors Service said it downgraded Deutsche Lufthansa AG’s senior unsecured ratings to Ba1 from Baa3. Moody's also assigned a Ba1 corporate family rating and a Ba1-PD probability of default rating to Lufthansa. All of Deutsche Lufthansa AG’s ratings are on review for downgrade.

“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,” Moody’s said in a press release.

The passenger airline sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment. More specifically, the weaknesses in Lufthansa's credit profile, including its exposure to most destinations across the world, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions, the agency said.

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