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Fitch Expects to Rate Bombardier's Planned $1B Sr Unsecured Notes 'BB+'; Outlook Negative.

CHICAGO -- Fitch Ratings expects to assign a rating of 'BB+' to Bombardier Inc.'s (BBD) planned issuance of at least $1 billion of senior unsecured fixed-rate notes with maturities not to exceed 10 years. This rating action repeats Fitch's announcement in a press release dated Feb. 8, 2010. BBD terminated its previous planned debt offer and related tender offer on March 8, 2010 due to unfavorable conditions in the debt capital markets. Earlier today it announced new debt and tender offers that are similar to the previous offers. Refer to Fitch's press release dated Feb. 8, 2010 for a full description of the rating rationale.

Proceeds from BBD's new debt will be available to fund a tender offer for up to $550 million of existing debt due between 2012 and 2014 and to support the company's liquidity. BBD has the option to increase the tender offer up to $1 billion, slightly less than the maximum of $1.25 billion in BBD's previous tender offer. Otherwise, the new tender offer is similar to the previous offer.

BBD's ratings are supported by its business diversification, leading market positions and a large backlog that helps to reduce the near-term impact of order volatility. Over the long term, BBD is focused on building a stronger capital structure and further reducing leverage, which would help reduce its cost of funds and improve the company's financial and strategic flexibility. However, the Negative Rating Outlook incorporates weak demand in BBD's business jet market and pressure on free cash flow in 2011 largely related to working capital that could prevent significant improvement in the near term. These concerns are partly offset by BBD's substantial liquidity which will be supported by the new debt.

Applicable criteria are available at 'www.fitchratings.com' and specifically include:

--'Corporate Rating Methodology' (Nov. 24, 2009).

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.
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Publication:Business Wire
Geographic Code:1U3IL
Date:Mar 15, 2010
Words:399
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