S&P rates Pegasus, notes B

S&P assigned a B long-term issuer credit and issue ratings to Turkey’s Pegasus Hava Tasimaciligi AS (Pegasus Airlines) and its senior unsecured notes.

The outlook is stable.

The company issued $375 million 9¼% senior unsecured notes due April 2026. This is smaller than the $500 million that was anticipated when preliminary ratings were assigned.

In effect, this reduces the liquidity headroom but has no material impact on the rating.

S&P now expects liquidity sources will cover uses by at least 1.2x in the 12 months started April 1, 2021, versus at least 1.5x previously.

Additionally, the agency forecasts S&P Global Ratings-adjusted funds from operations to debt of up to 5% in 2021, improving to 10%-13% in 2022 on the back of gradual recovery in passenger volumes.

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