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Air France-KLM (NR, BB+, BBB-) Responds to EU decision on State Aid

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AFFP has welcomed today's EU decision on State Aid being compliant (vs. EU court annulling it previously) and has clarified (as we noted yesterday was the case for both LHA and AFFP); "The Dutch and French aid measures were repaid in full by June 2022 and April 2023 respectively." Full here.


Perhaps a marginal credit positive for when the next crisis does come around (that EU rules won't stand in the way) BUT focus for us remains on earnings on the 25th and the year ahead - neither look good for AFFP. New 29s currently -35bps inside new Finnair 29s - equal rated on FOY's explicit government ownership/support, standalone worse for latter (-2 notches on ratings). Switch screens some value to us, we remain cautious on AFFP in general, particularly on potential hybrid refi supply.

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AFFP has welcomed today's EU decision on State Aid being compliant (vs. EU court annulling it previously) and has clarified (as we noted yesterday was the case for both LHA and AFFP); "The Dutch and French aid measures were repaid in full by June 2022 and April 2023 respectively." Full here.


Perhaps a marginal credit positive for when the next crisis does come around (that EU rules won't stand in the way) BUT focus for us remains on earnings on the 25th and the year ahead - neither look good for AFFP. New 29s currently -35bps inside new Finnair 29s - equal rated on FOY's explicit government ownership/support, standalone worse for latter (-2 notches on ratings). Switch screens some value to us, we remain cautious on AFFP in general, particularly on potential hybrid refi supply.