Moody's lowers Textron

Moody's Investors Service said it lowered the ratings of Textron Inc. and its wholly owned finance subsidiary, Textron Financial Corp. - senior unsecured to Baa3 from Baa2 and the short-term rating to Prime-3 from Prime-2.

The outlook is negative.

This completes the review of Textron's ratings opened on Feb. 4.

"The ratings were lowered in recognition of deterioration in the credit quality of Textron Financial's portfolio with higher-than-expected charge-offs, and sharper than anticipated deterioration in the environment for Cessna's business jets. Weaker TFC credit quality will increase the capital call on Textron," noted Bob Jankowitz at Moody's Investors Service.

Sharply lower earnings and cash flow at Cessna will more than offset the stable cash flow from certain of Textron's defense related units, the agency added.

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