Fitch to rate Lockheed Martin notes A-

Fitch Ratings said it expects to assign an A- rating to Lockheed Martin's proposed senior unsecured notes due 2036.

Fitch already rates the company's issuer default rating A, senior unsecured debt A-, bank facility A- and commercial paper F-2.

Lockheed has offered up to $1 billion of the new notes and cash in exchange for existing debt maturing in 2029, 2024, 2023 and 2026. The purpose of the exchange offer is to lower Lockheed's average cost of borrowing and to extend the average maturity of outstanding debt.

The outlook is stable.

Fitch said the ratings reflect the company's position as a leading defense contractor, high U.S. defense spending, strong cash flow/liquidity and large backlog.

Concerns include a cash-deployment strategy focused on share repurchases and dividends, U.S. government budget deficits and their potential impact on future defense spending, a large pension deficit and some program concentration in the aeronautics segment.

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