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S&P cuts Hawker Beechcraft
Standard & Poor's said it lowered Hawker Beechcraft Inc.'s corporate credit rating to B- from B+ and the senior secured and unsecured debt of Hawker Beechcraft Acquisition Co. LLC to B from BB The recovery rating was revised to 2 from 1.
The agency lowered the company's senior unsecured and subordinated debt to CCC from B- with recovery rating at 6. Ratings were removed from CreditWatch, where they were placed with negative implications on Jan. 30.
The outlook is negative.
"The action reflects primarily a sharp downturn in business aviation, Hawker Beechcraft's primary market and the potential for distressed redemption offers for the company's secured and unsecured debt, given deeply discounted market prices for the securities," S&P analyst Roman Szuper said in a statement.
The corporate credit rating reflects high debt leverage, modest profitability with poor credit protection measures, large working capital swings and risks associated with the current market downturn, the agency said.
Those factors outweigh the company's position as a well-established major manufacturer of business jets, turboprops, and piston aircraft, and adequate near term liquidity, the agency noted.
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