Raytheon Co looks less appealing to Standard & Poor’s Corp, and the New York ratings agency has downgraded the Lexington, Massachusetts defence electronics company’s commercial paper to A-1′ from A-1′-plus, its rating on the company’s IRBs to single-A’-plus from double-A’ – no, we hadn’t a clue what IRBs were either, but we try not to leave you hanging on for things like that, and a little research suggests that they should be called IDRBs, but are not – and are Industrial Development Revenue Bonds, loans made by the Commonwealth of Massachusetts to encourage companies to increase investment within the state, and its preliminary rating on the company’s $500m Rule 415 shelf debt to single-A’-plus/single-A’ from double-A’/double-A’-minus. It assigned its preliminary single-A’-plus/single-A’ rating to Raytheon’s $1,500m Rule 415 mixed shelf registration. About $3,700m of debt is outstanding all told. Reason for the moves is that Raytheon’s $2,300m debt-financed acquisition of unrated E-Systems Inc is expected to reduce financial flexibility materially for an extended period. Funds from operations to total debt, an important financial protection measure, is expected to recover to the mid-50% range, consistent with current ratings, within two years, the agency said.
