The ratings on the U.K.-headquartered defense contractor BAE Systems PLC reflect Standard&Poor's Ratings Services' view of BAE's strong competitive positions in the global defense market through a portfolio of diverse high-priority programs. BAE designs, develops, and manufacturers a wide range of land combat vehicles and armaments, defense electronics, submarines, surface combatants, military aircraft, and security electronics, and provides support services. The company benefits from its good customer, program, and geographic diversification. The ratings are likewise supported by our view of the favorable credit characteristics of the defense industry. We view BAE's business risk profile as "strong" under our criteria. These strengths are partly offset by the risk associated with potential additional acquisitions and a likely decline in defense
