TEXT - S&P rates Lockheed Martin exchange notes 'A-'

Thu Nov 15, 2012 11:24am EST

Related Topics

Nov 15 - Standard & Poor's Ratings Services today assigned its 'A-' rating
to Lockheed Martin Corp.'s proposed 4.07% senior unsecured notes due
2042. The company has offered to exchange the proposed notes plus cash for up to
approximately $3.4 billion of certain existing debt maturing between 2023 and
2040. The company will issue the notes under SEC rule 144A with registration
rights. 

The ratings on Lockheed Martin reflect our expectations that the company will 
be able to generate significant free cash flow despite lower demand from the 
U.S. government and that management will balance the allocation of capital 
among dividends, share repurchases, acquisitions, and voluntary pension 
contributions. The "intermediate" financial risk profile reflects credit 
ratios that are somewhat weak for the rating, mostly because of large 
postretirement liabilities (most of which are recoverable under government 
contracts), but solid cash generation and "strong" liquidity. The "strong" 
business risk profile incorporates the company's position as the largest 
defense contractor worldwide, a healthy contractual backlog, and good program 
diversity. 

RELATED CRITERIA AND RESEARCH
     -- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18, 
2012 
     -- Standard & Poor's Standardizes Liquidity Descriptors for Global 
Corporate Issuers, July 2, 2010
     -- Key Credit Factors: Methodology and Assumptions On Risks In The 
Aerospace And Defense Industries, June 24, 2009 
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 



RATINGS LIST 

Lockheed Martin Corp.
 Corporate Credit Rating            A-/Negative/A-2

New Rating 

Lockheed Martin Corp.
 Senior Unsecured
  4.07% sr unsecd notes due 2042    A-
FILED UNDER: