Fitch lowers TAM

Fitch Ratings said it downgraded TAM SA's foreign- and local-currency long-term issuer default ratings to B+ from BB-, $300 million senior unsecured note due to 2020 to B+ with a recovery rating of RR4 from BB-, $300 million senior unsecured note due to 2017 to B+ with a recovery rating of RR4 from BB-, long-term national rating to BBB+(bra) from A-(bra) and 500 million Brazilian real debentures issuance due 2012 to BBB+(bra) from A-(bra).

The outlook was revised to stable from negative.

The downgrades reflect the deterioration in TAM's credit profile due to higher leverage levels as a result of lower operating cash generation, Fitch said.

The company's weak performance largely reflects lower RASK levels (lower yields and load factors) as a result of the adverse operating environment for the airline industry during the first part of 2009 and the strong competition in the market over the last several quarters, the agency said.

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