Originally Posted by
hercretired
I don't believe AA's debt is "junk" status officially
https://www.fitchratings.com/entity/...p-inc-80361387
Depends on the individual bond issue. Some bonds, collateralized by newer aircraft, are much higher. Even NK has some A and AA rated bonds outstanding:
But overall, Fitch rates the company’s creditworthiness as junk - both for AA and NK, B- for AA and BB- for NK.
https://www.fitchratings.com/entity/...p-inc-80361387
https://www.fitchratings.com/entity/...s-inc-93771290
That is typical for airlines currently (post COVID), some worse than others.
Example:
SPECIAL REPORT
Stagflation Would Raise Liquidity and Refinancing Risks for Airlines and Auto Suppliers (Airlines, Auto Suppliers Are More Exposed Than Auto Manufacturers)
Thu 05 May, 2022 - 4:12 PM ET
Stagflation would heighten liquidity and refinancing risks for some U.S. airlines and auto suppliers, with rising interest rates having the potential to add further pressure. Fitch Ratings views airlines as having medium to high rating risk under a scenario of sustained high inflation and sharply lower economic growth. This is due to cyclicality, energy dependence, already negative FCF and significant upcoming maturities. Credit effects would vary by issuer. The Rating Outlooks for Delta Air Lines (BB+), United Airlines, Inc. (B+), Southwest Airlines Co. (BBB+), Spirit Airlines, Inc. (BB–), JetBlue Airways Corporation (BB–), Alaska Air Group, Inc. (BB+) and Air Canada (B+) are already Negative.