Rafael is benefitting from an ongoing surge in demand for many of its products and services, with its backlog reaching a historic high. However, pressure on the credit quality of Rafael's 100% owner, Israel (A/Negative/A-1), is in turn weighing on the ratings on Rafael. We therefore lowered our long-term issuer credit rating on Rafael to 'A-' from 'A'. We also affirmed the 'A-1' short-term rating. The stable outlook signifies our expectation that demand for the company's products and services will remain strong for the next two years, with Rafael maintaining a net cash position and strong liquidity. We continue to believe that Rafael plays a very important role to Israel, due to the company's range of advanced defense products and
