Fitch Expects to Rate Bombardier's Planned $1B Sr Unsecured Notes 'BB+'; Outlook Negative.
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'.
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|Date:||Mar 15, 2010|
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