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S&P gives BAE notes BBB
S&P said it assigned its BBB long-term issue rating to the proposed benchmark senior unsecured notes, due 2030, to be issued by BAE Systems plc.
“We expect BAE to use the proceeds from the proposed notes to fund a £1 billion contribution to its pension schemes, following the company’s announcement to this effect on Feb. 20, 2020. We view this proposed issuance as being in line with BAE’s previously announced funding strategy,” said S&P in a press release.
“We already adjust BAE’s reported debt by adding its pension deficit to arrive at our S&P Global Ratings-adjusted debt. The proposed issuance will result in higher reported term debt but will reduce BAE’s pension deficit by broadly the same amount. We, therefore, consider that the proposed benchmark debt issuance will be broadly neutral to our adjusted debt, and also to our ratings on BAE,” the agency said.
The outlook is stable.
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