On April 24, 2006, Standard&Poor's Ratings Services revised its outlook on BAE Systems PLC to stable from negative. At the same time, Standard&Poor's raised its short-term corporate credit rating to 'A-2' from 'A-3', and affirmed its 'BBB' long-term corporate credit rating on the U.K.-based major defense firm. About £4.4 billion of debt is outstanding. The outlook revision is based on BAE Systems' improving profitability, better-than-expected cash generation, and the reduced risk profile of some key programs. The ratings on Farnborough, U.K.-based BAE Systems reflect its strong competitive positions in the global defense market, an industry with generally favorable credit characteristics, and good liquidity, offset by modest, albeit improving, profitability and a sizable pension deficit. The ratings
