S&P: Lockheed Martin notes A-

Standard & Poor’s said it affirmed the A-/A-2 corporate credit rating on Lockheed Martin Corp.

The agency also said it assigned an A- rating to the company’s proposed issuance of $1.5 billion to $2 billion in senior unsecured notes in three tranches with 10-, 20-, and 30-year maturities.

The outlook is stable.

The ratings reflect a belief that the proposed debt issuance does not result in a material change in Lockheed Martin’s financial profile or management’s financial policy, S&P said.

The company is planning to issue $1.5 billion to $2 billion of unsecured notes to prefund about $1 billion of debt due in 2016, the agency said, with the remainder for general corporate purposes.

Credit ratios in 2014 were worse than expectations, mostly because of a $2 billion increase in the company’s pension liability and higher-than-expected current taxes, S&P said.

Although revenues and earnings will likely be down modestly in 2015 because of pressures on the U.S. defense budget, the agency said it believes the company will continue to generate solid free cash flow.

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