Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
02 Aug 2010
Ba2 rating assigned to planned new $750 first lien notes
New York, August 02, 2010 -- Moody's Investors Service affirmed its B2 Corporate Family and Probability
of Default ratings and all of its other debt ratings of Continental Airlines,
Inc. ("Continental") including on the Enhanced Equipment
Trust Certificates. Moody's upgraded its Speculative Grade
Liquidity rating of Continental to SGL-2 from SGL-3.
The ratings outlook is negative.
Moody's also assigned a Ba2 rating to the planned issuance by Continental
of $750 million of first lien senior secured notes due 2015 ("Notes").
The Notes will be guaranteed on a senior secured basis by Continental's
subsidiaries Air Micronesia, Inc. ("AMI") and
Continental Micronesia, Inc. ("CMI").
Certain route authorities between the U.S. and Japan and
China and the U.S. and London Heathrow, slots and
gates or facility access required to operate service under the certain
route authorities, and the assets and capital stock of AMI and CMI
serve as the collateral of the Notes.
"The affirmation of the B2 Corporate Family rating recognizes Continental's
improved operating performance, higher cash balance and stronger
credit metrics achieved since the end of 2009," said Moody's
Airline Analyst, Jonathan Root. "The affirmation also
signifies the potential for Moody's to maintain the B2 rating if
the proposed merger with UAL Corporation (B3 corporate family, on
review for upgrade) is completed under terms that enable the combined
entity to achieve the potential revenue and cost synergies that have been
identified," continued Root. However, the outlook
remains negative because of the industry's weak track record in
successfully executing large business combinations, the need to
negotiate new unified contracts for the respective labor groups that will
provide the merged company with a competitive cost structure and uncertainty
about the sustainability of the recent growth of demand, particularly
from corporate customers.
The upgrade of the Speculative Grade Liquidity rating to SGL-2
reflects the increase in the unrestricted cash, cash equivalents
and short-term investments ("Cash") balance to about
$3.5 billion at June 30, 2010 and anticipation that
Cash could remain above $3.2 billion through the seasonal
trough that typically occurs in the fourth calendar quarter. The
announced Note offering will provide a significant amount of new debt
capital, $350 million of which will refinance a credit facility
due in June 2011. The balance will be used for general corporate
purposes and reduces the extent to which additional capital may be needed
to meet other 2011 debt maturities.
The B2 Corporate Family Rating considers Continental's well established
business position serving business and leisure passengers, with
strong hubs in Houston, Texas; Newark, New Jersey;
and Cleveland, Ohio. Moody's estimates that credit
metrics in upcoming quarters are likely to remain indicative of the single-B
category, notwithstanding that it expects year-on-year
growth of airline operating metrics to slow because of more difficult
comparisons and the potential of a modest slowdown in demand if forecasts
of tepid global GDP growth are realized. The B2 rating also reflects
Moody's opinion that the average price of a barrel of oil is likely
to remain below $90 in upcoming quarters, which should prevent
the recurrence of the high-fuel price induced stress on liquidity
and credit metrics that took place in 2008 and 2009. Please see
page 6 of Moody's Industry Outlook for the Global Integrated Oil
industry published on July 28, 2010 available on moodys.com
for its current oil price assumptions. Continental maintains unit
cost and contribution margin per available seat mile measures (each not
stage length adjusted) that are competitive with its legacy carrier peers.
Importantly, Continental has continued to upgrade its fleet with
new aircraft purchases and has completed the addition of winglets to its
narrow-body aircraft, which should help to lower its fuel
We anticipate little upwards pressure on the ratings before the closing
of the merger. The ratings could be downgraded prior to the completion
of the merger if the cost of jet fuel was to significantly increase above
$2.60 per gallon or if Cash was to fall below $2.5
billion. The generation of negative free cash flow, Debt
to EBITDA that is sustained above 6.5 times or Funds from operations
+ interest to interest of below 2.0 times could also negatively
affect the ratings. Moody's could stabilize the outlook upon
the closing of the merger if it expects the company to have a labor cost
structure that is competitive with its U.S. peers and the
U.S. regulatory review does not require the carriers to
divest a significant number of routes or hubs in the U.S.
The inclusion of upstream and downstream guarantees of each other's
debt obligations could also positively affect ratings on certain instruments
as determined by Moody's Loss Given Default Rating Methodology.
The principal methodology used in rating Continental is Moody's Global
Passenger Airlines, published in March 2009 and available on www.moodys.com
in the Rating Methodologies sub-directory under the Research &
Ratings tab. Other methodologies and factors that may have been
considered in the process of rating Continental can also be found in the
Rating Methodologies sub-directory on Moody's website.
The last rating action on Continental was on May 3, 2010 when Moody's
affirmed the B2 Corporate Family rating and kept the ratings outlook at
..Issuer: Continental Airlines Finance Trust II
....Preferred Stock Preferred Stock,
Downgraded to LGD6, 95% from LGD6, 93%
..Issuer: Continental Airlines, Inc.
....Senior Unsecured Conv./Exch.
Bond/Debenture, Downgraded to LGD5, 74% from LGD5,
....Senior Unsecured Regular Bond/Debenture,
Downgraded to LGD5, 74% from LGD5, 71%
..Issuer: Continental Airlines, Inc.
....Speculative Grade Liquidity Rating,
Upgraded to SGL-2 from SGL-3
..Issuer: Continental Airlines, Inc.
....Senior Secured Regular Bond/Debenture,
Assigned Ba2, LGD2, 21%
Continental Airlines, Inc. based on Houston Texas,
is the world's fifth largest airline as measured by the number of
scheduled miles flown by revenue passengers in 2009.
Michael J. Mulvaney
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
Moody's Investors Service
Moody's affirms B2 CFR of Continental Airlines; outlook negative
250 Greenwich Street
New York, NY 10007
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.