Fitch sees BB rating for NG spin-off

Northrop Grumman hasn't said whether it will spin off or sell its shipbuilding operations, but Fitch Ratings expects to assign a BB Issuer Default Ratings to Huntington Ingalls Industries Inc., upon completion of the company’s potential spin-off. Fitch said the ratings reflect HII's position as a leading company in the defense shipbuilding industry with core capabilities in building aircraft carriers, nuclear submarines, large amphibious attack vessels, and surface combatants. The company is the sole source manufacturer on about 66 percent of its revenues, and it has a large and highly visible $17 billion backlog. Fitch said HII is well-positioned in the current defense spending environment, with roles on four of the Department of Defense's top 12 programs in the fiscal 2011 budget. Fitch's key concerns include HII's revenue concentration with the Navy and Coast Guard, the ongoing restructuring at the company's Gulf Coast operations and uncertainty about U.S. defense spending after fiscal 2012. (Source: Business Wire, 01/24/11)