Standard & Poor’s has announced:
- •We are withdrawing our ‘BB’ issue-level rating, and ‘4’ recovery rating, on Bombardier Inc.’s proposed US$1 billion of unsecured notes. The company has decided to not issue these notes.
- •We are also affirming our ‘BB’ long-term corporate rating on Bombardier.
- •While Bombardier’s decision to not issue debt at this time will mean a somewhat better leverage ratio, with an adjusted debt-to-EBITDA ratio of about 6.3x compared with 7.0x for 2012, the company will not benefit from
US$1 billion in additional liquidity.
- •We continue to view Bombardier’s current liquidity position, with a US$2.1 billion cash balance, as adequate, but there is less cushion if capital expenditures were to increase due to delays in the CSeries programs.
- •The stable outlook reflects our expectations that the company will continue to generate strong cash flows and credit metrics will improve over the next two years.
…
Under the current business conditions, we believe an upgrade is unlikely in the near term. Nevertheless, when what we view as more normal and stable market conditions return and the company successfully launches the CSeries, we could consider revising the outlook to positive or raising the rating on Bombardier if in turn the company improves its financial measures, with adjusted debt to EBITDA falling below 4x or adjusted FFO to debt reaching 20% on a sustained basis.
Last week’s S&P downgrade was discussed on PrefBlog. Neither of these announcements had any direct effect on preferreds, but market effect was very negative, with BBD.PR.C down about 10% at the lows.
BBD has three series of preferred outstanding: BBD.PR.B, BBD.PR.C and BBD.PR.D.
This entry was posted on Wednesday, November 21st, 2012 at 12:56 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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BBD Junk Issue Withdrawn; S&P Downgrade Remains
Standard & Poor’s has announced:
Last week’s S&P downgrade was discussed on PrefBlog. Neither of these announcements had any direct effect on preferreds, but market effect was very negative, with BBD.PR.C down about 10% at the lows.
BBD has three series of preferred outstanding: BBD.PR.B, BBD.PR.C and BBD.PR.D.
This entry was posted on Wednesday, November 21st, 2012 at 12:56 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.