Fitch Affirms Textron & Textron Financial's Ratings; Outlook Still Positive

Business Wire,  Jan 26, 2007  

Tags: Fitch, Microsoft Outlook, Textron Financial

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Asset quality at TFC continued to show a positive trend for the first nine months of 2006 compared to year-end 2005. Nonperforming assets as a percentage of finance assets was 1.43% at Sept. 30, 2006 compared to 1.53% at year-end 2005. Annualized net charge offs as a percentage of average-owned receivables declined to 0.36% for the nine months ended Sept. 30, 2006, from 0.44% for the comparable period in 2005. With the decline in nonperforming assets and delinquencies, Fitch expects net charge-offs to remain close to current levels.

Partially offsetting TFC's positive operating performance is the rise in leverage. Managed debt to tangible equity increased to 9.22 times (X) at Sept. 30, 2006 from 8.69(x) in the prior year. TFC's managed leverage target is 9.5 times (X). Fitch considers TFC's leverage to be at the high end of the current rating category and any further increase would be viewed negatively.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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