Martin Marietta Corp’s plan to pay $1,900m in cash for Grumman Corp has given the rating agencies cause for thought, and Standard & Poor’s Corp said it may downgrade the single-A senior debt and A-1 commercial paper ratings of its Martin Marietta Technologies Inc unit. The agency says that although it had anticipated further acquisitions, a transaction of this size is not incorporated into Martin Marietta’s current rating, but the increased financial risk will be somewhat offset by an improved overall business risk profile – the company should benefit from increased programme diversity in defence electronics and cost-saving opportunities in complementary operations. Moody’s Investors Service Inc has the senior debt of the unit at A2 and says it was was placed under while Moody’s looks at the direct and indirect impact of the that this transaction will have on the firm’s cash flow, liquidity and its overall financial flexibility.
