Fitch has assigned a 'BBB-' rating to the proposed 2027 senior unsecured notes to be issued by Embraer Netherlands, a wholly owned subsidiary of Embraer. The notes will be unconditionally guaranteed by Embraer. Proceeds from these unsecured notes, which are expected to reach a benchmark size of US$500 million to US$1 billion, will be used for general corporate purposes, including prefunding debt maturities. Fitch expects little impact on Embraer's net debt levels.
Embraer's ratings reflect its competitive positions in the commercial and business jet markets; large backlog (US$19.6 billion) covering several years of sales; several promising defense programs; and the generally favorable environment in the global commercial aviation industry, said Fitch. Embraer's adequate credit metrics, solid liquidity profile, mostly held outside Brazil, and its large export revenues combined with some offshore operating cash flow further support the 'BBB-' ratings, the agency added.
The ten-year notes launched at $750 million with a 5.40% coupon and a spread to US treasuries of T+287.7basis points.
Bookrunners are BB Securities, JP Morgan and Santander. Settlement is on February 1 2017.