Fitch ups Northrop Grumman view to positive

Fitch Ratings said it revised Northrop Grumman Corp.'s outlook to positive from stable and affirmed the company's BBB+ issuer default, senior unsecured debt and bank facility ratings and BBB convertible preferred stock.

The agency said the outlook revision is based on more than $500 million of debt reduction so far in 2006, the expectation of additional debt reduction before the end of the year and steady margin improvement. The ratings reflect Northrop Grumman's competitive position within the defense industry, high levels of U.S. defense spending, a balanced defense product portfolio, financial flexibility, liquidity and solid cash generation.

Concerns focus on the lingering impact of Hurricane Katrina on some of Northrop Grumman's operations, a dispute over insurance policies covering damage caused by Hurricane Katrina, large share repurchases and some risks within the Department of Defense budget, Fitch said.

The company's debt-to-operating EBITDA ratio for the last 12 months ended June 30 was 1.5x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.