Moody’s rates Allegiant Travel notes B1

Moody's Investors Service said it assigned a B1 rating to Allegiant Travel Co.’s new $100 million of 5˝% senior unsecured notes, to be added on to the company's existing $300 million of senior unsecured notes due July 15, 2019.

The corporate family rating is unchanged at Ba3.

The outlook is stable.

Proceeds from the notes will be used for general corporate purposes, likely to include the repayment of debt or for future liquidity needs.

The notes are guaranteed by Allegiant's domestic subsidiaries, including the airline operating company, Allegiant Air, LLC and a subsidiary that owns a number of its aircraft, Sunrise Asset Management, LLC. The notes will be subordinated to secured debt of its subsidiaries, including the about $286 million of debt of Sunrise secured by aircraft.

Through the first nine months of 2016, revenues grew by 8% and operating expenses by 7.6%, leading to an 8.8% increase in reported operating profit to $302 million, Moody’s noted.

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