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S&P trims General Dynamics
S&P said it lowered General Dynamics Corp.’s ratings by a notch, including its issuer rating to A- from A.
“GD's credit metrics will likely be weaker in 2021 and 2022 than previously expected.The company's adjusted EBITDA margins weakened to 14.3% in 2020 from 15.1% in 2019, mainly as a result of the pandemic's impact on business jet volumes in the aerospace segment. We expect further deterioration to 13.5%-14.5% in 2021 due to continued softness in this segment and a shift to new, lower margin aircraft models,” S&P said in a press release.
As a result of weaker earnings and its financial policy, S&P said it forecasts funds from operations (FFO) to debt of around 27% to 31% in 2021, relatively unchanged from 29% in 2020, and below the previous projections of 34%-38%.
The outlook is stable.
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