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Fitch upgrades Lockheed Martin
Fitch Ratings said it raised Lockheed Martin's issuer default rating, senior unsecured debt rating and bank facility rating to A- from BBB+ and affirmed the company's F2 commercial paper rating. The outlook is stable.
The upgrade is based on the company's strong operating performance, including margin expansion and cash generation, the more stable outlook for some of its largest defense programs, substantial financial flexibility and the level of its credit statistics relative to its defense peers and other industrial corporations, the agency said. The upgrade is also based on the recent releases of the fiscal year 2007 Department of Defense Budget Request and the Quadrennial Defense Review, both of which reduced uncertainty in the defense spending environment.
Fitch said rating concerns include the possibility of multi-billion dollar acquisitions, 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 modest program concentration in the aeronautics segment.
Debt to EBITDA improved to 1.5x in 2005 from 1.8x in 2004.
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