Fitch rates General Dynamics notes A

Fitch Ratings said it assigned an A ratings to General Dynamics Corp.'s new 3.5-year, five-year and 10-year notes.

General Dynamics' A issuer default rating, A senior debt rating, A credit facilities, F1 short-term issuer default rating and F1 commercial paper rating are unchanged. The outlook is stable.

Proceeds totaling $1.5 billion will be used to refinance $750 million of debt maturing later this month as well as general corporate purposes.

The ratings on General Dynamics reflect the company's strong free cash flow, financial flexibility and solid credit metrics, the agency said. High defense spending levels, the company's competitive positions in business jets and defense, and the large backlog also support the ratings.

Rating concerns focus on the potential for large acquisitions or share repurchases, although General Dynamics' liquidity, cash generation and debt reduction in 2010 mitigate this risk, the agency added. Risks to core defense spending after FY2012 and the uncertain impact of a decline in defense spending for operations in Iraq and Afghanistan are also general rating concerns.

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