S&P changes RTX outlook to negative

S&P said it changed its outlook on RTX Corp. to negative from stable and affirmed its BBB+ ratings on the company and its senior unsecured debt.

RTX's $10 billion debt-funded accelerated share repurchase program will weaken credit measures for the next year or so, the agency said.

“The increase in debt and interest will result in credit measures that are weak for the rating, including funds from operations (FFO) to debt of 18% in 2023 and 21% in 2024. The company is adding debt during a period of elevated interest rates relative to its existing cost of debt,” S&P said in a press release.

Another issue for RTX is remediating a manufacturing flaw in its PW1100 geared turbofan aircraft engines made by its Pratt & Whitney unit, the agency noted.

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