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Moody’s gives General Dynamics notes A2
Moody's Investors Service said it assigned A2 ratings to the new senior unsecured notes that General Dynamics Corp. announced May 8 to refinance certain short-term debt used to fund the April 3 acquisition of CSRA, Inc.
The stable outlook is unaffected.
Moody’s said the A2 rating reflects its expectation that General Dynamics will prioritize repayment of the CSRA acquisition debt to sequentially strengthen and restore debt metrics to pre-transaction levels within about two years, which will require a significant reduction in share repurchases, which were almost $1.6 billion in 2017.
The agency anticipates at least $2 billion of annual free cash flow in upcoming years, which provides ample ability for GD to reduce debt.
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