Fitch lowers GenCorp ratings

Fitch Ratings said it lowered the ratings on GenCorp Inc.'s secured bank facilities to BB- from BB, senior subordinated notes to B+ from BB-, convertible subordinated notes to B- from B, and contingent convertible subordinated notes to B- from B.

The outlook is negative.

Fitch said the downgrades reflect the lower-than-expected proceeds anticipated from the sale of the GDX Automotive segment and the deterioration in GenCorp's current and projected credit ratios.

Fitch said other general rating concerns that continue to be incorporated in the ratings include the company's weak free cash flow, high debt levels, potential environmental liabilities, pending lawsuits and arbitrations, and the affect the upcoming U.S. elections could have on several of the company's defense and space programs, including missile defense.

Factors which continue to support the ratings include GenCorp's substantial real estate holdings, the overall defense spending environment, current liquidity position, the tax shield that could be generated by the proposed GDX transaction, fully funded pension plans, and the recent dividend cut.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.