Fitch assigns Pegasus, bonds BB-

Fitch Ratings said it assigned Pegasus Hava Tasimaciligi AS’ first-time foreign- and local-currency long-term issuer default ratings BB-. The agency also assigned Pegasus' upcoming $500 million of senior unsecured bonds a BB- rating.

“The ratings of Pegasus reflect high execution risk inherent in its aggressive growth strategy, a weak operating environment with foreign-exchange (FX) and geopolitical risks, weaker leverage and coverage metrics and smaller scale than many peers'. The ratings also take into account its strong domestic position in Turkey with strong growth prospects on both international and domestic routes, an industry-leading cost base with a young and fuel-efficient fleet leading to stronger EBITDAR margin than most other Fitch-rated airlines' and strong liquidity,” Fitch said in a press release.

The outlook is negative, reflecting the “downside risk to demand recovery, especially on international routes, due to slow vaccine roll-outs in Europe, including Turkey, sporadic emergence of new Covid variants and prolonged cross-border travel restrictions,” the agency said.

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