Spirit Aerosystems plans to offer $300 million in notes due in 2017 through a private placement.
In a statement Moody's ratings agency says Spirit Aero plans to use proceeds from the issuance to repay $150 million on its senior secured revolver, with the net balance increasing its liquidity profile.
Moody's has reaffirmed its Ba3 corporate family rating for Spirit Aerosystems, citing its still modest leverage, good liquidity profile and now "an improved, more balanced capital structure which provides flexibility to manage through the current commercial aerospace downcycle".
The financing also allows Spirit Aero to manage through possible future development programme delays and cost over-runs and "positions the company to successfully address the projected ramp-up of Boeing 787 production".
The ratings also issued by Moody's take into account Spirit's "strong position in non-OEM commercial aviation aerostrcutures across most aircraft platforms, typically on a long-term contract, sole source basis and the still very substantial backlog [of the company]".
But Moody's also highlights the highly-cyclical nature of new aircraft demand and its relationship to air travel demand and the heavy investment required during the development and growth phases in the commercial aviation cycle.
Yet Moody's believes Spirit Aero's current order backlog combined with its improved liquidity profile and financial stability after the notes issuance "provides sufficient flexibility" for Spirit Aero to remain in its current ratings category.
Source: Air Transport Intelligence news
