(Adds action from Fitch and Moody's, updates stock price)
DOW JONES NEWSWIRES
L-3 Communications Holdings Inc. (LLL) announced plans to sell
$750 million of 10-year notes in a private placement to qualified
institutional investors to pay off $1.3 billion in borrowings.
In response, Fitch Ratings moved the aircraft-maintenance
contractor into investment-grade territory, highlighting the debt
reduction and elimination of near-term maturities. The company,
which raised its ratings outlook on L-3 to positive last month, is
now rated at BBB- with a stable view.
Proceeds from the debt sale, along with cash on hand, will go to
redeem $750 million of notes due in 2012 and repay a $650 million
loan due next year. As such, it will also replace its $1 billion
credit line with a three-year one of at least $750 million. Many
companies have been selling new debt and/or stock in recent months
to pay off near-term borrowings. As of June 30, L-3 had $4.5
billion of long-term debt.
Moody's Investors Service issued its own one-notch upgrade of
L-3, to one step below investment grade at Ba1. Its outlook was
changed to stable to positive. Beyond the refinancing, Moody's also
highlighted its operating expectations for L-3.The
aircraft-maintenance contractor has seen profit continue to rise
amid consistent revenue gains.
Shares were up 1.1% in recent trading to $80.86.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com