Moody's, the leading bond rating service, has cut the rating of bonds issued by GPA's guaranteed subsidiaries from B1 to Ba2 and has put the rating of the debt issued directly by the company on review, with a further downgrading anticipated.
The downgrading, which affects dollars 1.8bn worth of tradeable debt, has come because Moody's believes that the outcome of the restructuring is increasingly uncertain.
Furthermore, Moody's has warned that the recent default by PWA Group, the airline holding company based in Calgary, Alberta, could result in a further loss of leasing revenue and could mean that even more unwanted planes could come on to the market, so depressing the value of the aircraft GPA owns.
GPA, which is led by the mercurial entrepreneur Tony Ryan, has said it hopes to raise a further dollars 150m of equity finance in the restructuring.
In addition it wants to put back the payment schedule on dollars 900m of bank debt and delay taking delivery of some aircraft that it has ordered from manufacturers such as Boeing.
GPA had to cancel its dollars 800m flotation earlier this year because of lack of support, and also failed to get away a dollars 350m convertible stock offering in October.
The group admitted last month that it would need a refinancing and said that it hoped it could also receive help from such quasi- governmental bodies as the US Export-Import Bank and the European Bank for Reconstruction and Development.Reuse content