Fitch Ratings Withdraws Virgin Australia's Rating

(The following statement was released by the rating agency) Fitch Ratings-Sydney-15 December 2020: Fitch Ratings has affirmed Virgin Australia Holdings Limited's (VAH) Long-Term Foreign-Currency Issuer Default Rating at 'D'. At the same time, Fitch has chosen to withdraw the rating for commercial reasons. Accordingly, the agency will no longer provide ratings (or analytical coverage) for VAH. VAH exited administration under the private ownership of Bain Capital on 17 November 2020. The financial position of the airline on the exit and its new capital structure have not been publicly disclosed. Under the Deeds of Company Arrangement (DOCA) that was approved by creditors, unsecured creditors will receive between 13 and 9 cents in the dollar on their claims, meaning the 'D' IDR is still appropriate. Virgin's business plan is focused on bringing back profitable routes and realigning its cost structure under its new ownership. VAH and Bain Capital are taking steps to achieve these goals, including ensuring the airline's restructured financial profile can support its operations. Key Rating Drivers Key rating drivers are not applicable because the rating has been withdrawn Derivation Summary The rating of 'D' reflects VAH's earlier entry into voluntary administration and that its financial structure under new private ownership, Bain Capital, has not been publicly disclosed. RATING SENSITIVITIES Rating sensitivities are no longer relevant given today's rating withdrawal. Best/Worst Case Rating Scenario International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579. Liquidity and Debt Structure New Owners Determine Strategy: VAH's liquidity stresses led to it entering voluntary administration. The airline's new owners have worked to shore up the airline's ongoing financial profile. As part of the administration process, unsecured creditors will receive between 9 cents and 13 cents on the dollar on debt outstanding prior to VAH's entry into administration. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG Considerations Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg Following the withdrawal of ratings for VAH, Fitch will no longer be providing the associated ESG Relevance Scores. Virgin Australia Holdings Limited; Long Term Issuer Default Rating; Affirmed; D ; Long Term Issuer Default Rating; Withdrawn; WD Contacts: Primary Rating Analyst Kelly Amato, CFA Director +61 2 8256 0348 Fitch Australia Pty Ltd Suite 15.01, Level 15 135 King Street Sydney 2000 Secondary Rating Analyst Leo Park, Associate Director +61 2 8256 0323 Committee Chairperson Vicky Melbourne, Senior Director +61 2 8256 0325 Media Relations: Peter Hoflich, Singapore, Tel: +65 6796 7229, Email: peter.hoflich@thefitchgroup.com Additional information is available on www.fitchratings.com Additional Disclosures Dodd-Frank Rating Information Disclosure Form (https://www.fitchratings.com/site/dodd-frank-disclosure/10146979) Solicitation Status (https://www.fitchratings.com/site/pr/10146979#solicitation-status) Additional Disclosures For Unsolicited Credit Ratings (https://www.fitchratings.com/site/pr/10146979#unsolicited-credit-ratings-disclosures) Endorsement Status (https://www.fitchratings.com/site/pr/10146979#endorsement-status) Endorsement Policy (https://www.fitchratings.com/site/pr/10146979#endorsement-policy) ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 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