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S&P boosts BAE Systems
S&P said it raised its ratings for BAE Systems plc and its issues to BBB+ from BBB.
“Despite the Covid-19 pandemic, BAE exhibited positive top-line growth in 2020 and 2021, and we expect this trend to continue through 2022 and 2023. Many defense players fared well during the pandemic, with minimal disruption to operations or impact on financial results and credit metrics for the full-year 2020 and 2021 (versus issuers across many other industries). BAE was no exception in this regard, and we expect the group's relatively robust operating performance will continue through 2022 and 2023,” S&P said in a press release.
“Defense industry conditions should remain broadly favorable in all of BAE's core markets through 2022.We believe BAE remains well positioned in the U.S. market (about 45% of sales) after making two large acquisitions in 2020, given our expectation that the current U.S. administration is unlikely to make any material short-term adjustments to defense spending and priorities. In the U.K., where BAE is the largest defense contractor, defense and security spending is set to increase over the next four years,” the agency added.
The outlook is stable.
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