Fitch downgrades Travelport

Fitch Ratings said it downgraded Toro Private Holding I, Ltd.’s (Travelport) long-term issuer default rating to CCC+ from B-.

The agency also cut the first-lien and second-lien instruments issued by Travelport (Luxembourg) Sarl to CCC+ and CCC-, from B and CCC+, respectively. Fitch removed all the ratings from rating watch negative.

“The IDR downgrade reflects the larger-than-envisaged impact of the coronavirus pandemic on Travelport’s operations and financial profile. The virtual standstill in global air traffic and tourism led to an acceleration of cash outflows in April and May 2020, creating an immediate capital need. In early June 2020, it issued $220 million in new notes – out of a total $500 million available – backed by collateral transferred from its restricted group and provided by shareholders and affiliates outside of the restricted group,” Fitch said in a press release.

Fitch said it forecasts revenues and operating margins to recover, but leverage to stay elevated above 10x until at least 2022.

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