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Business Editors
NEW YORK--(BUSINESS WIRE)--June 2, 2003
Fitch Ratings has affirmed the 'BBB-' ratings on Northrop Grumman Corporation's (NOC) senior unsecured debt and bank facilities, the 'BBB-' rating on Litton Industries' senior unsecured debt, and the 'BB' rating on NOC's convertible preferred stock. Fitch has also assigned a 'BBB-' rating to the debt of Northrop Grumman Space & Mission Systems Corporation (formerly TRW Inc.), a wholly-owned subsidiary, which NOC recently agreed to guarantee. Fitch has revised the Rating Outlook on all classes of debt to Positive from Stable.
The Positive Rating Outlook reflects improving credit statistics, which are the result of significant debt reduction (down 26% as of March 31, compared to year-end 2002) and expected revenue growth.
Since Fitch initiated ratings on NOC earlier this year, several rating concerns have been resolved, including the sale of TRW Automotive, the amount and timing of debt reduction, the B-2 tax payment, and CEO succession. NOC completed the TRW Automotive divestiture in the first quarter, receiving $3.9 billion in cash and debt retained by TRW Automotive, a $600 million PIK note, and a 19.6% equity stake (valued at $170 million) in TRW Automotive. So far this year NOC has used the TRW Automotive proceeds and existing cash balances to retire $3.4 billion of fixed rate debt. In the first quarter NOC also paid the $1 billion tax bill related to the B-2 bomber program. This payment caused highly negative cash from operations in the ...
Source: HighBeam Research, Fitch Revises Northrop Grumman's Outlook to Positive.