Fitch downgrades Rolls-Royce

Fitch Ratings said it downgraded Rolls-Royce plc’s long-term issuer default rating and senior unsecured rating to BBB- from BBB+.

“The downgrade reflects weaker than previously expected cash flow generation leading to a greater spike in funds from operations (FFO) gross leverage for FY20 and FY21 with leverage remaining outside our previous sensitivities into FY22,” Fitch said in a press release.

“The cash flow deterioration and scale of the leverage spike in FY20, together with the expectation of weaker metrics for FY21 have driven the two-notch downgrade to BBB-,” Fitch said.

The outlook is negative.

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