Moody’s assigns Baa2 to Amadeus program

Moody's Investors Service said it assigned a provisional Baa2 rating with a stable outlook to the €1.5 billion euro medium-term note program of Amadeus Finance BV.

Concurrently, the agency affirmed the Baa2 long-term issuer and unsecured ratings of Amadeus IT Holding SA and the Baa2 senior unsecured ratings of Amadeus Capital Markets, SA.

The outlook is stable.

The provisional Baa2 rating of Amadeus Finance is aligned with the Baa2 issuer rating of Amadeus IT Holding, reflecting that debt issued under the program will be unconditionally and irrevocably guaranteed by Amadeus IT Holding and Amadeus IT Group.

Amadeus IT Holding's Baa2 rating continues to reflect: (a) The company's leading position in the market for Global Distribution Services (GDS) providers; (b) its generally resilient profitability compared with the airline industry that it serves; and (c) the smaller, albeit higher-margin, IT solutions business, which have fairly high barriers to entry.

The rating also captures several challenges inherent in the GDS industry, notably the risk of further disintermediation by airlines and the risk of alternative distribution models emerging.

Moody's considers that Amadeus exhibits a solid liquidity-profile and benefits from: (a) Cash on balance sheet (€426 million at the end of Q3 2014); (b) access to an undrawn €300 million revolving credit facility; and (c) annual free cash flows exceeding €250 million per year.

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