ANKARA
Credit Rating Agency Moody's assigned an A2 rating to the securities to be issued by Turkish Airlines to fund the purchase of new Boeing B777-300ERs on Friday.
"The A2 rating of the securities considers the credit quality of Turkish Airlines, the importance of the Boeing B777-300ER aircraft to Turkish Airlines' network strategy, the initial equity cushion of about 35 percent (before priority claims) and the support of an 18-month liquidity facility." Turkish Airlines said in a statement.
The securities are called "Enhanced Equipment Trust Certificates." These are instruments typically used in aircraft finance in which the securities are sold to investors in order to finance the purchase of an aircraft. The aircraft is then leased to airline in exchange for payments to "trust certificate" holders.
The Turkish Airlines' securities are worth approximately $328 million, Moody's said.
On March 6, Moody's assigned a Ba1 corporate family rating and a Ba1-PD probability of default rating to Turkish Airlines for the first time in its history, and the outlook on the rating is stable.
"Our decision to assign a Ba1 CFR to Turkish Airlines balances the company's healthy financial profile and role as the national carrier against the execution risks associated with its high-growth strategy," said Rehan Akbar, an analyst in Moody's corporate finance group and lead analyst for Turkish Airlines.
