Moody’s cuts GOL, rates notes Caa2

Moody's Investors Service said it downgraded to Caa2 from B3 GOL Linhas Aereas Inteligentes SA's corporate family rating and assigned a Caa2 rating to the new subordinated secured notes due 2025 and senior secured notes due 2026 issued by GOL Finance in December and guaranteed by GOL and GOL Linhas Aereas SA.

Concurrently, Moody's axed the rating of the senior secured notes issued by GOL Finance to Caa2 from B2 and cut the rating on the senior unsecured notes issued by GOL Finance and GOL Equity Finance to Caa3 from Caa1

“The downgrade of GOL's CFR to Caa2 reflects the company's liquidity risk and sizeable upcoming refinancing needs. GOL's cash generation has not fully recovered from the impact of the pandemic and higher oil prices in the last years, and the company has been pursuing liquidity alternatives to refinance debt obligations and match its cash outflows to its internal cash generation,” the agency said in a press release.

Regarding the proposed Abra Group deal to raise cash and issue notes due 2028, Moody’s said it views the deal as a distressed debt exchange.

The outlook is negative.

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