Alaska Air Group Inc.’s corporate credit rating was downgraded to junk status at S&P Global Ratings, which cited the air carrier’s increased debt following Wednesday’s closing of its $4 billion acquisition of Virgin America Inc. The acquisition included the assumption of $1.4 billion in debt and leases. “This increase in Alaska’s debt has caused the company’s previously very strong financial risk profile to decline substantially,” S&P Global credit analyst Tatiana Kleiman. Alaska Air’s rating was cut to BB+ from BBB-, which is the ratings agency’s lowest investment grade rating. The outlook is stable. S&P Global said it believes Alaska Air faces integration risk as it combines the two airlines. Alaska Air’s stock slipped 0.4% in morning trade. It has gained 7.5% year to date, while the NYSE Arca Airline index has soared 29% and the S&P 500 has gained 11%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News