S&P puts Raytheon on watch

S&P said it placed all of the ratings on Raytheon Co., including the A+/A-1 issuer credit rating on CreditWatch with negative implications.

Raytheon announced that it will combine with United Technologies Corp. in an all-stock deal that will result in higher leverage, but better scale and diversity, S&P explained.

The agency said it will resolve the CreditWatch once the transaction closes.

The long-term issue credit rating could be lowered up to two notches, S&P noted.

The agency said the proposed merger will lead to material deterioration in credit measures due to the more cyclical and competitive nature of the strong commercial aerospace market.

S&P said it does not believe these negative factors are offset by the greater scale and diversity of the combined company.

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