Fitch Downgrades Bombardier To 'BBB+', Rtgs Placed on Neg Watch.Business Editors NEW YORK--(BUSINESS WIRE)--March 4, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has downgraded the senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. and bank facilities of Bombardier Inc. (BBD BBD In currencies, this is the abbreviation for the Barbados Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) and Bombardier Capital Inc. (BC) to 'BBB+' from 'A-'. Fitch has also downgraded BBD's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to 'BBB' from 'BBB+'. Fitch continues to rate BBD's and BC's commercial paper programs 'F2'. All ratings have been placed on Rating Watch Negative. Due to the existence of a support agreement and demonstrated support by the parent, BC's ratings are linked to Bombardier's ratings. These ratings cover approximately C$15.4 billion of debt and preferred stock. The rating change incorporates the lower than anticipated fiscal 2003 free cash flow and earnings announced today by BBD. Fitch believes that the resulting credit protection measures are more in line with the new rating category. The Rating Watch Negative reflects uncertainty regarding the outlook for fiscal 2004, anticipated accounting changes, likely write-downs, and possible strategic initiatives from the new CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Resolution of the Rating Watch will follow more information on these issues, as well as more clarity on the sources of the lower than expected operating results in fiscal 2003. Fitch will meet with BBD's management team, and some of the above issues could be clarified at that time. However, final resolution of the Rating Watch could come after the release of BBD's full fiscal 2003 results. |
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