The ratings on BAE Systems PLC reflect its strong competitive positions in the global defense market, its participation in an industry with generally favorable credit characteristics, its good customer and geographic diversity, and an overall appropriate financial profile. These factors are offset by risks associated with potential additional acquisitions and likely slower growth in defense spending in some of the company's key markets. The ratings also incorporate Standard&Poor's Ratings Services' expectations that BAE Systems will continue to pursue a moderate financial policy and balanced capital allocation. London, U.K.-based BAE Systems is a major supplier of military aircraft; land combat vehicles and armaments; defense electronics, submarines, and surface combatants for the Royal Navy; and a variety of support services.
