Fitch Ratings said it has affirmed the Issuer Default Rating (IDR) and long-term debt ratings for Textron Inc. (TXT) and Textron Financial Corporation (TFC) at ‘BBB-‘. The Rating Outlooks are Stable. TXT’s short-term ratings have been affirmed at ‘F3’.

Fitch said the acquisition of Beechcraft provides TXT with an opportunity to broaden its presence in piston-engine and turboprop aircraft and realize operating efficiencies across the combined business with Beechcraft. The transaction increases TXT’s exposure to the aerospace and defense business which represents approximately three-fourths of TXT’s manufacturing revenue.

The affirmation and equalization of TFC’s ratings with those of TXT reflects Fitch’s view that TFC is a core subsidiary to its parent, and Fitch’s expectation that the acquisition will have a minimal impact on TFC. It is possible that a portion of future Beechcraft aircraft sales may be financed through TFC, although Fitch believes any increase in originations at TFC will be managed in the context of TFC’s targeted overall size of approximately $1.5 billion.

The equalization of the TXT and TFC ratings reflects the strong operational and financial linkages between the two companies and the strategic importance of TFC to its parent as illustrated through a support agreement. The agreement requires TXT to maintain full ownership in TFC and ensure TFC has a minimum net worth of $200 million and fixed-charge coverage of 1.25x.

While non-captive receivables remain in the portfolio, TFC is prudently managing the timely liquidation and sale of the golf mortgage and structured assets. The non-captive portfolio totaled $210 million at Sept. 30, 2013, compared to $370 million at Dec. 31, 2012. The structured portfolio, which consists primarily of rail car leases, is the largest portion of the non-captive segment. Fitch believes these leases have lower credit risk given the strong credit quality of the lessee.

For the complete Fitch release with a full rating list click here.