S&P has upgraded Qantas’ credit rating to investment grade citing the following factors as reason for the upgrade
- Qantas Airways has committed to a more conservative financial policy framework
- S&P assesses Qantas' revised financial framework to be more formal, forward-looking, and pre-emptive, and should help to buffer the group against the earnings volatility inherent in the airline industry
- As a result, S&P has raised the long term corporate credit and bond ratings on the airline. The outlook is stable, reflecting S&P’s view that the group's more conservative financial framework, strengthening balance sheet, and domestic market position, should underpin credit quality at the new rating level
The initial impact on the Qantas bonds following the announcement has been positive, with yields tightening around 20 basis points and the upgrade presents an opportunity for Qantas bondholders to take profit.
FIIG has consistently supported the Qantas credit throughout its recent turbulent history and the news is very positive. We expect Moody’s to follow suit in the coming months and also upgrade Qantas’ credit rating to investment grade.
Please contact your FIIG representative for further information on the Qantas bonds.