TEXT-S&P rates Precision Castparts proposed senior notes 'A-'
Dec 17 - Standard & Poor's Ratings Services today assigned its 'A-' rating to Precision Castparts Corp.'s (A-/Stable/A-1) proposed issuance of senior unsecured notes. The company plans to issue up to a total of $3 billion of three-, five-, 10-, and 30-year notes, and will use the proceeds to fund the pending acquisition of Titanium Metals Corp. (Timet; not rated) and general corporate purposes. Precision Castparts announced the acquisition last month and expects it to close by the end of the year. We affirmed our ratings on Precision Castparts on Nov. 12, 2012, citing our expectations that credit ratios, which will decline materially from currently very strong levels following the proposed acquisition, will return to levels more appropriate for the ratings over the next 12-18 months. We expect that the strong commercial aerospace market and the company's very successful history of integrating and improving acquired operations should result in funds from operations to debt above 60% by the end of fiscal 2014 (ending March 31, 2014), supporting our "minimal" financial risk profile assessment. We also believe that the acquisition of Timet will improve Precision Castparts' competitive position modestly, but not enough to change our already "satisfactory" business risk assessment. RELATED CRITERIA AND RESEARCH -- Precision Castparts 'A-/A-1' Ratings Affirmed On Titanium Metals Acquisition; Outlook Remains Stable, Nov. 12, 2012 RATINGS LIST Precision Castparts Corp. Corporate Credit Rating A-/Stable/A-1 New Rating Precision Castparts Corp. Senior unsecured 3-year notes A- 5-year notes A- 10-year notes A- 30-year notes A- Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.