MOODY'S LOWERS RATINGS OF VALUJET, INC. TO B3 FROM B1 AND PLACES RATING UNDER REVIEW FOR POSSIBLE FURTHER DOWNGRADE
New York, 06-18-96 -- Moody's lowered the senior unsecured rating of ValuJet, Inc., the parent of ValuJet Airlines, Inc., to B3 from B1 and placed the B3 rating under review for possible further downgrade following the indefinite grounding of the airline by the Federal Aviation Administration (FAA). The FAA's decision to suspend ValuJet's flights was based on concerns over the airline's safety procedures and came after a lengthy investigation of the company's maintenance program.
In leaving the rating under review for possible further downgrade, Moody's said that it will evaluate ValuJet's prospects for a quick resumption of flights as well as the future effect of FAA regulations on its cost structure should it be allowed to resume flying. The rating agency also will evaluate the company's liquidity positions to determine how long it can remain grounded and still meet its ongoing financial obligations.
ValuJet, Inc. and ValuJet Airlines, Inc. are headquartered in Atlanta, Ga.
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