Moody’s has placed easyJet’s credit rating under review for a downgrade of two notches or more, which would drop it into junk territory, following the £5.7 billion takeover by Apollo Global Management. Lead analyst Luigi Bucci said the deal introduces substantial uncertainty around the airline’s conservative financial policy and will result in a material deterioration of its credit profile. The ratings agency assumes the acquisition, priced at £7.15 per share in cash, will be financed through equity from Apollo-managed funds and debt from a banking syndicate, with private equity ownership typically leading to higher debt levels. Moody’s also noted the buyout comes at a sensitive point as easyJet’s capital spending is forecast to jump from £1.2 billion last year to more than £3 billion in fiscal 2028 for fleet renewal, while operating profit is expected to dip to £200 million this year amid high fuel prices. Apollo funds are expected to own 49.9% of easyJet, with existing shareholders including founder Stelios Haji-Ioannou retaining between 45.1% and 49.9% and the remainder held via an employee trust.
EasyJet PLCMoody's warns easyJet's credit rating faces a downgrade to junk due to the Apollo takeover, increasing debt and financial risk.
Apollo Global Management LLC Class AApollo's £5.7bn takeover of easyJet is the central event, likely to enhance its portfolio and returns.
Moodys Corporation