Fitch gives BB+EXP/RR4 to Orbital notes

Fitch Ratings said it assigned a rating of BB+EXP/RR4 to Orbital ATK Inc.'s proposed senior unsecured notes.

Orbital plans to issue $400 million of senior unsecured notes due 2023 that will rank equally with the company's existing unsecured notes.

Additionally, the company plans to enter into $1.8 billion of new senior secured credit facilities concurrent with the offering of the notes. The new credit facilities will consist of an $800 million term loan facility and a $1 billion revolving credit facility.

Proceeds from the offering and the new term loan will be used to repay all of the borrowings under Orbital's existing senior secured credit facilities. Remaining proceeds, if any, will be used for general corporate purposes.

Fitch calculates Orbital's total debt will remain largely unchanged after the transactions, and the ratings will cover roughly $1.5 billion of outstanding long-term debt after giving effect to the new issuances and the expected repayment of the existing debt.

The ratings and stable outlook are supported by the company’s solid margins and strong cash flows, good product/program diversification, significant cost saving synergy opportunities from the merger between Alliant Techsystems Inc. and Orbital Sciences Corp. completed on Feb. 9, 2015, and Orbital's role as a sole source provider for many of its products, the agency said.

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