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Key rating drivers are not applicable because the rating has been withdrawn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.

RATING ACTIONS

ENTITY/DEBT	RATING		PRIOR
Virgin Australia Holdings Limited	LT IDR	D 	Affirmed		D
LT IDR	WD 	Withdrawn		D

VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

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