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WN's Debt Is Downgraded  
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Posted (4 years 6 months ago) and read 1399 times:

Debt rating company Fitch has downgraded WN's debt based on their perception that WN is now approaching unhealthy amounts of leverage as well as the fact that WN has drawn down some credit lines.

http://www.reuters.com/article/marke...sNews/idINN2147358920081121?rpc=44

4 replies: All unread, jump to last
 
User currently offlineAWACSooner From United States of America, joined Jan 2008, 1415 posts, RR: 1
Reply 1, posted (4 years 5 months 4 weeks 1 day 23 hours ago) and read 1323 times:

THE SKY IS FALLING!!!!

User currently offlineFlyDreamliner From United States of America, joined Jan 2006, 2759 posts, RR: 15
Reply 2, posted (4 years 5 months 4 weeks 1 day 23 hours ago) and read 1278 times:

Nope, nothing that dramatic.

WN is just running into the same reality all of the other airlines are already facing. It was bound to happen sooner or later. Good management can stave off things like this, but market realities are what they are.

Nothing new here.

As for those debt rating agencies... those were the people who gave those subprime paper and derivatives AAA ratings... they have to be taken with some salt.


"Let the world change you, and you can change the world"
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 3, posted (4 years 5 months 4 weeks 1 day 22 hours ago) and read 1193 times:

it's easy to dismiss them but they do have profound effects on the costs of running a business and how a company is perceived.


Given the tight credit markets, it isn't too unusual to think that WN would draw down its credit lines but in doing so it is raising debt in a time when high debt is exactly what is crippling this economy.

The distincition between the LFCs and the network carriers is quickly deteriorating and it will be harder and harder for WN to continue to prosper to the degree it has in the past.

The irony is that the network carriers are probably layering on fuel hedges like crazy now so that the hedging advantage that WN has had will quickly be matched by other carriers when the economy does come back.

User currently offlineRFields5421 From United States of America, joined Jul 2007, 6140 posts, RR: 25
Reply 4, posted (4 years 5 months 4 weeks 1 day 22 hours ago) and read 1157 times:

Well I'm not going to pay for Fitch's service - but it looks like the BBB rating for LUV is still one to two levels above the other stable airlines in the US.
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