Moody’s lifts Latam Airlines

Moody’s Ratings said it upgraded to Ba3 from B1 Latam Airlines Group SA's corporate family rating, the rating of the $1.1 billion senior secured term loan B due in 2027, and the ratings of the $1.15 billion senior secured notes due in 2027 and 2029, co-issued by Latam and Professional Airline Services, Inc.

“The upgrade of Latam's ratings to Ba3 from B1 reflects the track record of strong operating and financial performance of the company during 2023 and strong traffic figures for early 2024, which gives Moody's Ratings' visibility over the sustainability of the current credit metrics and liquidity levels,” the agency said in a press release.

Latam cut its Moody's Ratings'-adjusted leverage to 2.8x at the end of 2023 from 6.1x at the end of 2022 while it produced $679 million of free cash flow in the year.

Moody's said it forecasts the airline's leverage to stay within 2.5-3x and its cash position to hit above 20 % of revenues in the next two years, which will cushion the company's credit quality even under stress scenarios.

The outlook is stable.

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