S&P:US Airways on CreditWatch developing |
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Wed, 10 Jan 2007 21:58
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NEW YORK (AFX) - Standard & Poor's Ratings Services said Wednesday its ratings on US Airways Group, including the 'B-' corporate credit ratings on US Airways Group and its America West Holdings Corp., America West Airlines Inc. and US Airways Inc. units, remain on CreditWatch with developing implications, following the carrier's decision to raise it's bid for bankrupt Delta Air Lines.The company's ratings were initially placed on CreditWatch on Nov. 15.US Airways today revised its proposal to merge with Delta Air Lines Inc., offering $1 billion more in cash. The sweetened offer, for which US Airways already has $8.2 million of committed financing, would provide about $10 billion in cash and stock to Delta's unsecured creditors, an approximate 19 percent increase over the previous bid.The combination would result in one of the world's largest airlines and US Airways still estimates annual revenue/cost synergies of $1.7 billion when fully phased in over a two-year period.'If US Airways is successful in completing the merger with Delta and realizing US Airways' expected synergies, ratings could be raised modestly,' said Standard & Poor's credit analyst Betsy Snyder. 'If US Airways completes the merger but encounters problems with integrating both airlines, particularly among the different labor groups, ratings could be lowered.'Standard & Poor's said it will assess the combined entity's operations and the effect of the increased level of debt on its financial profile in resolving the CreditWatch.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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