Brazil’s Gol airline downgraded by Moody’s on liquidity problems

Gol’s debt was downgraded by Moody’s Investors Service Wednesday because the airline faces a cash crunch in coming months as debt payments come due. Moody’s cut Gol’s corporate family rating to Caa1 from B3 and cut the company’s foreign currency rating for Gol Finance’s perpetual notes and senior notes due in 2017 to Caa2 from B3. Brazil’s weak economy has hurt sales, and the company’s traffic fell 9% in Q4 from a year earlier. Standard & Poor’s warned earlier this month it might downgrade Gol in the next 90 days. Gol has “insufficient liquidity” and faces a difficult market situation, and will need to either sell assets, carry out a capital increase or restructure its debt in coming months to meet its debt service needs in the next year to year and a half, Moody’s said while expressing confidence in the company’s management. <br/>