Delta Air Lines Inc.'s (DAL) issuer credit rating was downgraded two notches into "junk" territory at S&P Global Ratings, which an expected sharp decline in revenue in cash flow as the coronavirus outbreak has resulted in a "steep decline" in airline bookings. The rating was cut to BB from BBB-, which was the lowest investment grade rating. S&P said the rating remains on CreditWatch with negative implications, until it can determine the effects of the coronavirus outbreak on Delta's financial position. "While the company is reducing its capacity and some associated costs, and will benefit from the steep decline in oil prices, we expect these supporting factors to be more than offset by its much weaker traffic," S&P said. "However, we expect the volume of passenger traffic to begin to recover later this year and continue improving into 2021." The stock soared 18.5% in afternoon trading, on track to be the biggest one-day gain since it ran up 19.1% on Oct. 30, 2008, amid optimism over a government coronavirus rescue plan. The stock was still down 51% over the past month, while the S&P 500 has dropped 26%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
March 24, 2020 13:14 ET (17:14 GMT)
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