Moody's cuts General Dynamics unsecured rating

Moody's Investors Service said it downgraded its senior unsecured rating for General Dynamics Corp. to A3 from A2. Moody's also changed the outlook to stable from negative.

"Despite a supportive business outlook, the downgrade of the senior unsecured rating to A3 reflects the company's failure to materially deleverage since its April 2018 acquisition of CSRA for $9.7 billion. The company's financial policies have prioritized shareholder returns over debt repayment, resulting in credit metrics that have been sustained at levels no longer supportive of the prior A2 rating," said, Jonathan Root, Moody's lead analyst for General Dynamics, in a press release.

The revised outlook reflects expectations of an ongoing sound business profile, supported by the company's submarine business and its aerospace segment and that credit metrics will strengthen to levels more reflective of an A3 rating within 12 to 24 months, Moody’s said.

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