S&P takes General Dynamics off watch

S&P said it affirmed General Dynamics Corp.’s ratings and removed them from CreditWatch with negative implications, where it placed them on March 20.

“The reduced demand for General Dynamics Corp.’s business jets and related services due to the coronavirus pandemic will likely lead to weaker earnings and cash flow, though we expect the company’s credit metrics will likely return to levels we consider appropriate for the current rating in 2021,” S&P said in a press release.

S&P said it forecasts General Dynamics’ funds from operations-to-debt ratio to improve to the 35%-40% range in 2021, from about 30% in 2020 and sees its free operating cash flow-to-debt ratio rising to 30% next year from 15%-20% in 2020.

The outlook is negative.

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