It seems the government will have to pump money into airBaltic again. The rating agency Fitch Ratings ('Fitch') has downgraded the long-term rating of Latvia's national airline from 'B-'/negative to 'CCC+', according to Fitch's statement.
The CCC+ rating is one of the lowest levels of credit ratings, indicating a very high risk of default.
What the CCC+ Rating Means:
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The company is significantly dependent on favorable conditions to meet its debt obligations.
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The financial situation is unstable.
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There is a real threat that, in the event of a worsening market situation or the emergence of stresses, the issuer may fail to fulfill its obligations.
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This is a 'speculative' or 'junk' level rating.
Fitch also downgraded the rating of airBaltic's €380 million (IDR) senior secured long-term bonds. The recovery rating is 'RR3'.
The downgrade of the credit rating reflects a higher-than-expected level of indebtedness and weaker financial flexibility, resulting in a significant need for external financing over the next 12 months.
It also reflects uncertainty regarding the timing and revenues from the planned IPO. The company's operational results for 2025 were weaker than expected due to rising operating expenses and low profitability, leading to significantly negative free cash flow and limited liquidity.
Strengths of the rating include a leading position in the Baltic region, a modern and economical fleet, and business diversification, Fitch stated.
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