Fitch rates Huntington, notes BB, loan BBB-

Fitch Ratings said it expects to assign to Huntington Ingalls Industries, Inc. a long-term issuer default rating of BB, a rating of BBB- on its $600 million five-year senior secured term loan, a rating of BBB- on its $650 million senior secured revolving credit facility rating and BB rating on its $1.18 billion of Rule 144A senior unsecured notes rating.

The outlook is stable.

The ratings will cover about $1.9 billion of outstanding debt after the planned spin-off and about $105 million of senior unsecured legacy debt.

The company plans to use the proceeds from the term loan and the notes to pay a transfer to Northrop Grumman Corp., repay intercompany debt owed to Northrop Grumman and fund Huntington's initial liquidity, the agency said.

The ratings reflect the company's position as a leading company in the defense shipbuilding industry with core capabilities in building aircraft carriers, nuclear submarines, large amphibious attack vessels and surface combatants, Fitch said.

Key concerns include its revenue concentration with the U.S. Navy and Coast Guard, the ongoing restructuring at the company's Gulf Coast operations and uncertainty about U.S. defense spending after 2012, the agency said.

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