Moody's Ups Newport News

Friday, March 17, 2000
Moody's Investors Service upgraded the senior unsecured debt rating of Newport News Shipbuilding Inc. (NNS) to Ba1 from Ba2 to reflect the company's improving operating and cash flow performance, and its strengthening business outlook and balance sheet.

The ratings also incorporate its still-weak balance sheet, notwithstanding the recent gradual improvements.

Moody's also said that it maintained its Ba1 ratings on the company's bank facilities, which were formerly secured by essentially all of the company's assets. However, in conformance with the credit agreement, the collateral was recently released, and the bank facilities rank equally with the company's other senior unsecured debt.

Upgraded ratings are: Newport News Shipbuilding Inc.: its senior unsecured debt to Ba1 from Ba2; and its subordinated debt to Ba3 from B1. Confirmed ratings are: Newport News Shipbuilding Inc.-the Ba1 on its bank facilities.

After years of poor performance related primarily to its commercial shipbuilding business - which it exited - Newport News Shipbuilding recorded two years of improved operating performance and cash flows, which led to stronger overall coverage.

Furthermore, its positive cash flows have led to reduced debt levels, which together with its expanded equity base (through retained profits), have led to a somewhat stronger, albeit still leveraged balance sheet.

The company's outlook has also improved as a result of the resurgence of growth in the U.S. defense spending. The improved outlook also reflects its strong market position as the only U.S. shipyard capable of building nuclear-powered aircraft carriers and its advantageous position as one of the only two U.S. nuclear submarine builders.

These strong market positions for new platforms - together with its good profit margins, its refocus on the stable repair, overhaul and engineering sectors - indicate that the company will likely produce at least stable revenues and profits. Low capital expenditures and working capital requirements should lead to moderate free cash flows and continuing gradual debt reduction -which is in line with the rating agency's understanding of the company's financial objectives.

Moody's cautioned, however, that significant stock repurchases and/or debt funded acquisitions could undermine NNS' improving balance sheet, which, the recent debt reductions notwithstanding, remains highly leveraged.

Such actions would place pressure on NNS' credit quality. Newport News Shipbuilding, Inc., headquartered in Newport News, Virginia, is a world leader in building navy ships, aircraft carriers, and submarines.

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

North Sea Atlantic Joins the Technip fleet

On Saturday July 26, 2014, a ceremony was held in Bergen to officially name the latest new subsea construction vessel to join the Technip fleet, the North Sea Atlantic.

New Australian Navy Submarines to be Japan Built?

Australia should discuss building its next-generation fleet of submarines overseas, the Department of Defence said on Monday, a shift that could open the door to

Russian Navy Expansion Gathers Momentum

The Russian Navy celebrates its professional holiday by putting two new submarines into service and expects a new warship in the fall and several additional ships

Offshore

Offshore Installation at Lerwick

A large steel oil storage tank to be installed west of Shetland as part of Premier’s development of the Solan field has arrived in Lerwick onboard a heavy-transport vessel Xiang Yun Kou,

Wagenbourg New Crane for Oil, Gas, Energy Sector

Wagenborg Nedlift has expanded her crane fleet with a brand new 700 tonnes mobile crane. With this crane the fleet is significantly strengthened. Equipped with

Study: An Arctic Oil Well Blowout Could Spread More Than 1,000km

Oil from a spill or oil well blowout in the Arctic waters of Canada's Beaufort Sea could easily become trapped in sea ice and potentially spread more than 1,000 kilometres to the west coast of Alaska,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Offshore Oil Pod Propulsion Port Authority Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1328 sec (8 req/sec)