U.K.-Based BAE Systems PLC's Proposed Senior Unsecured Notes Rated 'BBB'

LONDON (S&P Global Ratings) April 7, 2020--S&P Global Ratings today assigned its 'BBB' long-term issue rating to the proposed benchmark senior unsecured notes, due 2030, to be issued by BAE Systems PLC (BAE). We expect BAE to use the proceeds from the proposed notes to fund a £1 billion contribution to its pension schemes, following the company's announcement to this effect on Feb. 20, 2020. We view this proposed issuance as being in line with BAE's previously announced funding strategy. We already adjust BAE's reported debt by adding its pension deficit to arrive at our S&P Global Ratings-adjusted debt. The proposed issuance will result in higher reported term debt, but will reduce BAE's pension deficit by broadly the same amount.

...April 7, 2020 LONDON (S&P Global Ratings) April 7, 2020--S&P Global Ratings today assigned its '###' long-term issue rating to the proposed benchmark senior unsecured notes, due 2030, to be issued by BAE Systems PLC (BAE). We expect BAE to use the proceeds from the proposed notes to fund a ú1 billion contribution to its pension schemes, following the company's announcement to this effect on Feb. 20, 2020. We view this proposed issuance as being in line with BAE's previously announced funding strategy. We already adjust BAE's reported debt by adding its pension deficit to arrive at our S&P Global Ratings-adjusted debt. The proposed issuance will result in higher reported term debt, but will reduce BAE's pension deficit by broadly the same amount. We therefore consider that the proposed benchmark debt issuance will be broadly neutral to our adjusted debt, and also to our ratings on BAE. Our '###/A-2' long-term and short-term issuer credit ratings and stable outlook on BAE reflect the company's...

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