Moody's upgrades Travel Leaders

Moody's Investors Service said it upgraded Travel Leaders Group, LLC's corporate family rating to Caa2 from Caa3 and its probability of default rating to Caa2-PD from Caa3-PD. The agency also raised the company's first-lien senior secured credit facility rating to Caa2 from Caa3. The outlook was changed to stable from negative.

"The upgrade of the CFR to Caa2 and stable outlook reflects our view that TLG's default risk has somewhat diminished given the company's enhanced liquidity position and expectation for a lower than expected monthly cash burn going forward, as travel demand gradually begins to recover," said Oleg Markin, a Moody's assistant vice president, in a press release.

"While TLG's operating performance will remain challenging due to the global widespread of Covid variants, which may result in new travel restrictions, we expect that all available cash sources to the company as well as ongoing sponsor support will help bridge to an anticipated recovery," added Markin.

Moody's said it forecasts the firm’s liquidity is adequate to cover any cash shortfall over the next 12-15 months, including expectation that free cash flow will turn breakeven in the second half of 2022.

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