S&P rates Embraer notes BB+

S&P said it assigned a BB+ rating and a 4 recovery rating to Embraer Netherlands Finance BV’s $750 million of 6.95% senior unsecured notes due 2028. Embraer SA and its wholly owned subsidiary Yabora Industria Aeronautica SA will guarantee the notes. The 4 recovery rating indicates expectations for average (rounded estimate: 45%) recovery.

Embraer intends to use up to $250 million of the proceeds to repurchase, through a cash tender its 2022 and 2023 notes, and the rest to pay the short-term debt and for general corporate purposes.

The repurchases and pay down of debt would extend the company’s debt maturity profile and allow it to maintain a comfortable liquidity cushion to face market uncertainties over the next several quarters, S&P said.

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