Moody’s cuts American Airlines

Moody's Investors Service said it downgraded all of its ratings of American Airlines Group Inc. and those assigned to subsidiary American Airlines, Inc., including the corporate family rating to B2 from Ba3, probability of default rating to B2-PD from Ba3-PD, senior unsecured debt ratings to Caa1 from B1, and senior secured debt ratings to Ba3 from Ba1.

Moody's also downgraded each of its ratings on the company's enhanced equipment trust certificates and the company's speculative grade liquidity rating to SGL-3 from SGL-2.

The outlook is negative.

The agency said the downgrade of the senior unsecured rating by three notches versus the two-notch decline in the corporate family rating reflects the increasing proportion of senior secured obligations in the company's capital structure, which diminishes the value available to unsecured claims in the application of Moody's loss given default rating methodology.

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