S&P lowers Tui view to negative

S&P said it revised the outlook on Tui AG to negative from stable and affirmed the BB long-term ratings and senior unsecured debt.

The recovery rating on the notes is unchanged at 3.

Tui recently issued a profit warning following the grounding of Boeing 737 Max 8 jets across Europe after already lowering its earnings expectations in February 2019 due to challenging market conditions, S&P said.

The agency said it lowered the earnings expectations for the second time this year and now forecast significantly negative free operating cash flow in fiscal 2019, leading to deterioration in adjusted funds from operations-to-debt to 22% to 23%.

The negative outlook reflects an expectation of weaker cash generation and the potential for further volatility and prolonged pressure on the group's earnings, cash flows and credit metrics amid challenging market conditions, S&P said.

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