S&P rates Israel Aerospace BBB-

Standard & Poor's said it assigned its BBB- long-term and A-3 short-term corporate credit ratings to Israel Aerospace Industries Ltd.

The outlook is stable.

The ratings are supported by the company's diversified positions in the global defense market, technological strengths, as indicated by a high share of exports representing 78% of sales and relatively low dependence on the domestic military budget, S&P said.

These strengths are offset, however, by the group's heavy cost structure resulting in modest operating margins, ongoing restructuring needs, a fair level of free cash flow generation, dependence on military budgets for a large part of business and lack of critical size for some products, the agency added.

The company, which is 100% controlled by the State of Israel (foreign-currency A-/positive/A-1, local-currency A+/positive/A-1), is the largest industrial company in the country with about 15,000 employees.

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