Harris Corp.'s Proposed $300 Million Floating Rate Unsecured Notes Rated 'BBB-'

WASHINGTON D.C. (S&P Global Ratings) Feb. 23, 2018--S&P Global Ratings today assigned its 'BBB-' issue-level rating to Harris Corp.'s proposed $300 million floating-rate unsecured notes due in 2019. The company will use the proceeds to make a voluntary contribution to its defined-benefit pension plan this year, allowing it apply the old 35% U.S. corporate tax rate. We believe this transaction does not affect our forecast for funds from operations to debt in fiscal 2018 (ending June 30, 2018) of 20%-24%. The lower pension liability and higher cash flow due to lower tax rates is offset by the increase in balance sheet debt. Our rating on Harris reflects its strong position in tactical radios, diversified product portfolio, and good program diversity.

...WASHINGTON D.C. (S&P Global Ratings) Feb. 23, 2018--S&P Global Ratings today assigned its '###-' issue-level rating to Harris Corp.'s proposed $300 million floating-rate unsecured notes due in 2019. The company will use the proceeds to make a voluntary contribution to its defined-benefit pension plan this year, allowing it apply the old 35% U.S. corporate tax rate. We believe this transaction does not affect our forecast for funds from operations to debt in fiscal 2018 (ending June 30, 2018) of 20%-24%. The lower pension liability and higher cash flow due to lower tax rates is offset by the increase in balance sheet debt. Our rating on Harris reflects its strong position in tactical radios, diversified product portfolio, and good program diversity. We expect the company's revenue to increase modestly over the next 12 months based on its recent contract wins and likely increases in U.S. and foreign government defense spending. We also expect Harris' EBITDA margins to improve because the...

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