Moody’s ups Air Canada, debt ratings

Moody's Investors Service said it upgraded Air Canada's corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD, first-lien senior secured rating to Ba3 from B1, second-lien senior secured rating to B3 from Caa1 and senior unsecured rating to Caa1 from Caa2.

The company's speculative grade liquidity rating was affirmed at SGL-2.

The ratings on Air Canada's 2013-1 class A, class B and class C pass-through trust certificates were upgraded by one notch to Baa1, Ba2 and B1, respectively.

The outlooks were changed to stable from positive.

"The upgrade of Air Canada's ratings is driven by our increased confidence in the carrier's ability to execute its significant expansion plans and cost reduction initiatives in a manner that enables its adjusted EBITDA to expand modestly and allows its adjusted financial leverage to remain under 5.5x," Moody’s vice president and senior credit officer Darren Kirk said in a news release.

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