Expert RA Confirms UTair and UTair-Finance A+ Creditworthiness Ratings

Expert RA rating agency has confirmed the A+ long-term creditworthiness rating (very high grade of creditworthiness) for UTair and UTair-Finance. The rating is positively affected by the leading market position of the airline, its moderately high liquidity level and high level of insurance coverage. UTair also maintains a high level of transparency, a low proportion of largest counterparties in its revenue and cost structures, a high level of diversification and an extensive geography of activities. Expert RA also pointed out UTair’s moderately low currency risks, acceptable level of debt diversification, low share of largest counterparty in its debt structure and its rapid rate of asset accumulation as positive factors in the rating confirmation.

Expert RA executives noted that UTair shareholder actively supports the company. “A decision was made to increase UTair capital by 13.8 billion rubles to cover company’s debt,” said Expert RA Director for Corporate Ratings Pavel Mitrofanov. “This has positively affected UTair’s position in the rating.”

The rating was limited to A+ level due to significantly high levels of debt load and mortgaged property combined with an insufficient level of capital. The airline’s creditworthiness outlook was changed from “stable” to “negative”, the third subcategory, due to the volatile situation in the aviation industry that is affecting the airline’s activities.

Expert RA also confirmed an A+ bond loan reliability rating (very high grade of reliability) on UTair Finance bond obligations series BO-06, BO-07, BO-08, BO-09, BO-10, BO-11, BO-12, BO13, BO-15 and 05. The ratings for bond series BO-03, BO-04 and BO-05 bond obligations have been recalled as UTair Finance has successfully discharged these bond obligations.