Moody’s rates Spirit AeroSystems notes Baa3

Moody's Investors Service said it affirmed the Baa3 rating on Spirit AeroSystems, Inc.’s senior unsecured notes and assigned Baa3 ratings to the company's new senior unsecured notes.

Proceeds from the new bond offering, combined with borrowings under the company's senior unsecured credit facility, will be used in part to finance the acquisition of Asco. The remainder of the proceeds will be used to fund an accelerated share repurchase program and to refinance existing debt.

The outlook remains stable.

Moody’s said Spirit's recent announcement of its $725 million accelerated share repurchase program and its $650 million debt-financed acquisition of Asco represents a higher tolerance for financial risk and will result in a step function increase in financial leverage.

Pro forma for the pending transactions, the agency expects debt-to-EBITDA (currently around 1.4 times) to peak at around 2.6 times and then decline toward 2 times, as the company focuses on debt reduction later this year.

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