Bombardier shares soar as ratings upgraded
MONTREAL - Bombardier Inc. (TSX:BBD.B) shares soared yesterday to the highest level in nearly six years as another rating agency upgraded the transportation giant's debt ratings.
The Montreal-based aerospace and transportation company's shares gained 40 cents to close at $7.56 yesterday, the highest level since August 2002.
The shares have increased 27 per cent in 2008.
Fitch Ratings upgraded Bombardier's long-term issuer rating one notch to BB , following similar moves by Moody's and Standard and Poor's.
Ratings for senior unsecured debt and preferred stock were also boosted as the service described Bombardier's outlook as stable.
"The upgrades to Bombardier's ratings reflect improved credit metrics, the company's progress in realizing higher margins and cash flow, and a solid outlook for many of its end-markets," Fitch said in a news release.
Bombardier's management have targeted regaining investment grade ratings as soon as possible.
Fitch noted Bombardier's large backlog, diversification, leading market positions, robust business jet market and healthy liquidity position.
Fitch said it has become more positive about the company's business case for the proposed 110- to 130-seat CSeries aircraft after meeting with program management.
"Fitch's previous concerns about the CSeries' source of technological advantage have been reduced by Bombardier's disciplined approach to designing the plane, which has increased the likelihood that the CSeries will produce the expected fuel efficiency, noise reduction and reduced emissions," it stated.
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