On March 7, 2005, Standard&Poor's Ratings Services placed its 'BBB'/'A-2' corporate credit and its other ratings on Farnborough, U.K.-based BAE Systems PLC on CreditWatch with negative implications. The action followed BAE Systems' announcement that it has agreed to acquire U.S.-based United Defense Industries Inc., which has a 'BB+' corporate credit rating, for $4.2 billion in cash, including assumed net debt (please see story on United Defense, also published on March 7, 2005). BAE Systems expects to finance the transaction with a new $3 billion credit facility, cash on hand, and proceeds from an equity issue. Although the acquisition will further expand BAE Systems' presence in the important U.S. defense market and diversify its operations, the significantly increased debt
