BWX Technologies Inc.'s cash flow is likely to be much weaker than we expected because of higher capital expenditures (capex) and working capital requirements, resulting in weaker credit metrics over the next two years than previously anticipated. Therefore, we are lowering our issuer credit rating on BWXT to 'BB' from 'BB+'. The outlook is stable. At the same time, we are lowering our rating on the company's unsecured notes due 2026 to 'BB' from 'BB+'. The recovery remains '4'. The stable outlook reflects our expectation that credit metrics will remain fairly stable at the revised lower levels over the next two years, with revenue growth offset by higher revolver borrowings to fund cash shortfalls. BWXT's position as the sole manufacturer
