TEXT-S&P rates Bombardier proposed snr notes

Tue Mar 6, 2012 4:59pm EST

March 6 - Standard & Poor's Ratings Services today said it assigned its debt
issue and recovery ratings to Montreal-based Bombardier Inc.'s      
(BB+/Stable/--) proposed US$500 million senior unsecured notes due March 15,
2022. We rate the notes at 'BB+' (the same as the corporate credit rating on
Bombardier), with a '4' recovery rating, indicating lenders can expect average
(30%-50%) recovery in the event of default. 	
	
The notes and the guarantees are senior unsecured obligations of Bombardier, 	
ranking equally with all existing and future unsecured unsubordinated debt of 	
the company. 	
	
Proceeds from the proposed US$500 million notes will be used to finance the 	
redemption and retirement at maturity of Bombardier's 6.75% notes due May 1, 	
2012, and for general corporate purposes. While this issuance will lead to a 	
slight increase in leverage net of retirement of the 2012 notes, we believe 	
the excess proceeds will improve the company's liquidity position.	
	
"The ratings on Bombardier reflect our view of the company's leading market 	
positions in the transportation and business aircraft segments, its good cost 	
efficiency, and increasing product range and diversity," said Standard & 	
Poor's credit analyst Jatinder Mall. "These positive factors are partially 	
offset, in our opinion, by the financing pressure Bombardier's customers face 	
in both the aerospace and transportation division, significant execution risk 	
in the launch of its upcoming CSeries jet, increasing leverage, and weakening 	
cushion under the financial covenants," Mr. Mall added.	
	
The stable outlook reflects our expectations that the company's credit metrics 	
will not deteriorate further and it will generate stronger cash flows in 2012 	
than in 2011 as it works to improve the delayed deliveries experienced on the 	
rail transportation side last year.	
	
Bombardier is engaged in the manufacture of transport solutions worldwide. It 	
operates in two distinct industries: aerospace and rail transportation and has 	
69 production and engineering sites in 23 countries, as well as a worldwide 	
network of service centers.	
	

RATINGS LIST	
Bombardier Inc.	
Corporate credit rating   BB+/Stable/--	
	
Rating Assigned	
Proposed US$500 mil. senior unsecured notes BB+	
 Recovery rating                            4
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