VistaJet Malta Finance P.L.C. — Moody’s rates Vista Global’s $150 million tap issuance Caa1

Rating Action: Moody’s rates Vista Global’s $150 million tap issuance Caa1Global Credit Research – 02 Feb 2021Frankfurt am Main, February 02, 2021 — Moody’s Investors Service (« Moody’s ») has today assigned a Caa1 rating (on review for downgrade) to the $150 million tap to the existing $550 million senior unsecured notes due in 2024 issued by VistaJet Malta Finance P.L.C. and co-issued by XO Management Holding Inc. The B3 corporate family rating (CFR) of Vista Global Holding Ltd. (Vista Global or « the group ») and all other ratings remain unaffected. The ratings remain under review for downgrade.RATINGS RATIONALEThe proceeds of the issuance will be used to repay the equivalent of aircraft financing debt reducing the amount of aircraft financing debt in Vista Global’s capital structure. The refinancing will extend the group’s debt maturity profile. It supports a gradual improvement of the group’s liquidity profile and thus is a first step to address Moody’s concerns which led to the decision to place the ratings on review for downgrade.Moody’s placed Vista Global’s ratings on review for possible downgrade on 21 January 2021, given its weak positioning in the B3 category throughout FY 2020 and the challenge to improve credit metrics back to the requirements for the B3 rating category in the next 12 — 18 months. The review will focus on (1) Vista Global’s business plan for 2021 and beyond with special focus on its ability to generate positive free cash flow and thus to reduce debt; (2) the company’s investment plans including the purchase of ten Challenger 350 aircraft from Bombardier and the related financing; and (3) Management’s financial policy with regard to leverage reduction, potential changes to the company’s capital structure and liquidity cushion. Moody’s expects to solve the review process within the next three months. At this stage, Moody’s expects that any potential rating change would be limited to one notch.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGVista Global currently has a high leverage of 11.1x debt / EBITDA as adjusted by Moody’s. Vista Global’s Moody’s adjusted EBITDA during the LTM period to September 2020 is impacted by revenue recognition policies which severely impacted reported EBITDA during the second quarter of 2020 when flight demand was low due to the COVID pandemic. Therefore, we do not anticipate any short term positive rating pressure. A stabilization of the rating would require (1) a reduction of leverage below 7x debt/EBITDA by year-end 2021, (2) EBITA margin improving to double digit in percentage terms in the next 12-18 months, (3) Vista Global’s ability to continue to sell a sufficient level of FSP hours to secure meaningful quarterly cash payments for a prolonged period, (4) the generation of sufficient free cash flow to meet the scheduled amortization of its aircraft financings, and (5) the commitment to a financial policy to finance growth without additional debt leading to weaker credit metrics.Absent of a clear path towards these expectations or in case of concerns regarding the company’s liquidity Moody’s would consider downgrading the ratings.ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS (ESG)The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Moody’s analysis has considered the effect on the performance of corporate assets from the current weak economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high.Moody’s regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Today’s action reflects the impact on Vista Global of deterioration in credit quality it has triggered, given its exposure to business aviation which has left it vulnerable to shifts in market sentiment in these unprecedented operating conditions.PRINCIPAL METHODOLOGYThe principal methodology used in this rating was Business and Consumer Service Industry published in October 2016 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1037985. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.COMPANY PROFILEHeadquartered in Dubai, Vista Global Holding Ltd. is the holding company of a leading global business aviation provider that serves corporates and high net worth individuals. The company offers flights through its two subsidiaries VistaJet Malta Finance P.L.C. and XO Americas Holding Inc. (XOJET) primarily by membership programs and on-demand charter on either its own aircraft (« on-fleet division ») or on a partner’s aircraft (« off-fleet division ») and generated approximately $1 billion revenues in 2019. Vista Global operates a fleet of 115 aircraft including ultra-long range, large cabin and super-mid cabin aircraft. The company is owned by majority shareholder and founder Thomas Flohr and minority shareholders Rhône Capital, Mubadala and Clearlake.REGULATORY DISCLOSURESFor further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. 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