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S&P cuts Embraer to BB+ from BBB-
S&P said it downgraded Embraer SA to BB+ from BBB-, saying it expects the company to report about a 50% drop in commercial jet deliveries in 2020. The agency said it also sees a cash burn of about $800 million from the pandemic.
S&P removed the ratings from CreditWatch and assigned Embraer’s senior unsecured notes a 4 recovery rating.
The agency said it forecasts revenue will be 30% lower than in 2019, leading to net debt to EBITDA of more than 8x.
“In 2021, assuming a recovery in commercial jet deliveries to 70-75, we expect a sharp increase in revenue to close to $5 billion,” S&P said in a press release.
The outlook is negative.
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