S&P boosts IAG

S&P said it raised its ratings on International Consolidated Airlines Group SA and its senior unsecured debt to BB+ from BB.

“We forecast that solid EBITDA-to-operating cash flow conversion will help IAG achieve sustained S&P Global Ratings-adjusted funds from operations (FFO) to debt of more than 20% (after 22% in 2022), notwithstanding significant capital expenditure (capex) for new aircraft this year and next,” S&P said in a press release.

The agency reiterated its forecast that IAG will deliver adjusted EBITDA of €4 billion in 2023. “In 2024, we expect demand will fully recover to pre-pandemic levels or even slightly above, leading to adjusted EBITDA increasing to about €5 billion, just €400 million shy of its 2019 value.”

The outlook is stable.

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