TEXT - S&P rates Raytheon proposed notes 'A-'

Tue Nov 27, 2012 1:08pm EST

Related Topics

Nov 27 - Standard & Poor's Ratings Services today assigned its 'A-' rating
to Raytheon Co.'s  proposed issuance of unsecured notes. The company has
not stated what amount of new notes it plans to issue, but it will use the
proceeds to redeem its $575 million 1.4% notes due 2014 and $400 million 1.625%
notes due 2015. Raytheon plans to issue the notes as a drawdown from its
existing shelf registration.

Our ratings on Raytheon reflect our expectations that cash generation will 
remain solid despite revenues and margins coming under pressure over the next 
few years because of likely cuts to U.S. defense spending. The ratings also 
reflect our belief that management will moderate share repurchases, if 
necessary, to preserve credit quality. The company's position as a leading 
U.S. defense contractor, with strengths in defense electronics, a broad 
program base, a relatively high proportion of foreign sales, and above-average 
profitability support our "strong" business risk profile. We assess the 
company's financial risk profile as "modest," reflecting solid cash 
generation, "strong" liquidity, credit measures that are generally appropriate 
for the rating (funds from operations to debt net of cash in excess of $1 
billion is about 45%), and management's conservative financial policy.


RELATED CRITERIA AND RESEARCH

     -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
     -- 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 

Raytheon Co.
 Corporate Credit Rating     A-/Stable/A-2

New Rating 

Raytheon Co.
 Sr unsecured notes          A-
FILED UNDER:
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