Fitch upgrades Bombardier

Fitch Ratings said it upgraded Bombardier Inc.'s issuer default and senior unsecured debt ratings to BB+ from BB and its preferred stock to BB- from B+.

The outlook is stable.

The agency said the upgrade reflects the company's improved credit metrics, progress in realizing higher margins and cash flow and a solid outlook for many of its end-markets. The ratings are also supported by a large backlog, the company's business diversification, its leading market positions, the robust business jet market and its healthy liquidity position.

Although Fitch anticipates that Bombardier could further strengthen its financial profile over the long term, the stable outlook incorporates shorter-term operating challenges that the company continues to address, including margins that remain relatively low by industry standards. Other concerns include business jet market cyclicality and the impact of exchange rate volatility on margins, financial results and planning.

The debt-to-EBITDA ratio declined to 3.24 times at the end of fiscal 2008 from 4.74 times one year earlier.

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