Moody’s rates Virgin Australia notes B3

Moody's Investors Service said it assigned a corporate family rating of B2 to Virgin Australia Holdings Ltd.

At the same time, the agency assigned a provisional B3 senior unsecured rating to the proposed $300 million senior unsecured notes issued by Virgin Australia.

The outlook is stable.

The notes will be fully and unconditionally guaranteed by certain of Virgin Australia's subsidiaries, subject to certain exclusions including, among others, Virgin Australia International Operations Pty Ltd., certain specified special purpose vehicles and certain additional immaterial subsidiaries. Members of the Velocity Sub-Group will be unrestricted subsidiaries and, as a result, will not provide a guarantee of Virgin Australia's obligations under the Notes. The notes will not be guaranteed by Tigerair Australia unless and until Virgin Australia completes the acquisition of the remaining 40% interest of such subsidiary.

"The B2 corporate Family rating primarily reflects Virgin's market position, its continued progress in executing its strategic objectives, the importance of the company to its shareholders with demonstrated financial support, and the strong liquidity profile," Moody's vice president and senior analyst Matthew Moore said in a news release.

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