Moody’s gives Avianca DIPs Ba3, B3

Moody’s Investors Service said it gave Avianca Holdings SA’s $1.2 billion senior secured super-priority debtor-in-possession term loans Ba3 ratings and a B3 rating to the $723 million senior secured super-priority term loan.

“The Ba3 rating on the $1.2 billion senior secured term loan A1 and A2 and B3 rating on the $723 million senior secured term loan B incorporate the senior secured super-priority position of the claims and a number of factors including the cause of the bankruptcy, the nature and scope of reorganization, the structural features of the DIP facility, size of the DIP facility relative to pre-petition debt and collateral coverage of the DIP facility,” the agency said in a press release.

Avianca plans to use the loans to give it the liquidity and flexibility to execute its restructuring plan through the Chapter 11 process. Avianca filed for Chapter 11 in May.

“This rating is assigned on a point-in-time basis and will be withdrawn as soon as practicable, before which it is subject to monitoring,” the agency said.

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