DBRS reviews Bombardier

DBRS said it placed Bombardier Inc.'s BB issuer rating, BB/RR4 senior debenture rating and Pfd-4 preferred stock rating under review with negative implications.

The agency said the review mainly reflects the recent deterioration in the company's financial profile caused by rising debt levels, which in turn is largely due to the elevated capital outlays associated with the C-series aircraft program, resulting in large negative free cash flows, further borrowing and higher leverage.

DBRS said it will likely remove the rating from under review with negative implications and downgrade Bombardier if the financial profile metrics do not show improvement from current levels or if they deteriorate further by the end of the third quarter of this fiscal year. Additionally, DBRS would downgrade the rating should the company announce further program delays or continue to have similar levels of capital outlays, negative free cash flows and leverage during the same timeframe.

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