Fitch Rates Philippine Airlines Subsidiary's Proposed Bonds
Fitch Ratings has given a BB rating to Philippine Airlines-owned Primero Agila's proposed senior notes, according to a recent release.Philippine Airlines and Air Philippines, both controlled by parent PAL Holdings (PSE:PAL), will unconditionally and irrevocably guarantee the notes.Philippine Airlines is a key driver of its parent's consolidated financial profile, making up for 90% to 100% of revenue, EBITDAR, cash, and debt, Fitch said.Philippine Airlines' rating stems from its major position in the domestic and international air passenger markets in the Philippines.The airline shows weaker EBITDAR fixed-charge coverage compared to other rated peers, although this is mitigated by strong liquidity, Fitch said.Network and business diversification, stronger cost efficiency as a hybrid with Air Philippines, and disciplined fleet growth efforts anchor the airline's business profile, the rating agency said.
