1.14 Like most companies which borrow from the private sector, NATS has had the creditworthiness of its finances rated by the major Credit Ratings Agencies. Despite the much more unfavourable market sentiment towards the aviation industry following September 11th, Standard and Poor's Credit Market Services has assessed the underlying strength of the Company as "A-", which means a strong investment grade proposition. Moody's Investors Services rated NATS as "Baa2", meaning that "Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time". In quantified terms, Moody's expects less than 0.2 per cent of companies rated as "Baa2" or higher to default on their loans in the course of a year.
1.15 Armed with these sufficiently supportive credit ratings, in August 2003 NATS refinanced most of its debt, replacing the remaining £600 million of the acquisition facility established when the Airline Group bought a controlling share in the Company, with the proceeds of a bond issue. The practical advantage of this refinancing to the Company is that bonds are a cheaper source of very long term finance, and diversify the company's sources of funding, reducing reliance on bank finance.