Fitch gives Rand BB, loans, notes BB+

Fitch Ratings said it assigned a BB long-term issuer default rating to Rand Parent, LLC (Atlas Air Worldwide Holdings Inc.) with a stable outlook. Fitch also gave BB+/RR2 ratings to the company's planned senior $300 million secured revolver, $800 million term loan and $800 million of floating rate senior secured notes.

“Atlas's IDR is supported by its contracted service offerings representing about 85%-90% of block hours in 2022 with terms that set pricing and minimum activity levels. Atlas also has a fleet of over 100 aircraft (48 aircraft within the collateral pool) that allows it operational and end-market flexibility. Leverage and coverage metrics are generally consistent with the rating level and supported by mandatory amortization on aircraft financings.

“The ratings also reflect the softening outlook for the company's operating environment, as it comes off peak levels, and the impact on FCF that contract renewals and spot rate exposure have in a declining rate environment. Atlas also operates in a highly competitive environment due to similar service offerings and broad geographic reach of industry peers, as well as alternative transport options,” Fitch said in a press release.

The agency said it projects Rand’s debt/EBITDA and adjusted debt/EBITDAR to be about 3.2x in 2023, before declining to the mid-2x area through the intermediate term assuming no new aircraft purchases or M&A.

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