Fitch rates new GenCorp convertibles B

Fitch Ratings said it has assigned a rating of B to GenCorp's proposed $100 million convertible subordinated notes and has affirmed the BB rating on the company's bank credit facilities, BB- rating on the senior subordinated notes and the B rating on the existing 5¾% convertible subordinated notes.

The outlook is stable.

GenCorp intends to use the proceeds of the proposed $100 million convertible subordinated notes to pay down a portion of GenCorp's outstanding bank facilities and for general corporate purposes.

Overall, Fitch said it considers this transaction to be relatively neutral to GenCorp's credit profile since about half of the new debt will be used to pay down amounts outstanding under the revolver and term loan A.

Fitch said its primary concern for the ratings continues to center on GDX Automotive's weak results in 2003 which were below Fitch's expectations.

GenCorp's ratings also reflect solid performance at Aerospace & Defense and AFC, the recent ARC Propulsion acquisition, the company's position in the favorable defense spending environment, a fully funded pension plan, and the additional cash flow and cushion that may be derived from continued development of the company's sizable real estate holdings.

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