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Bombardier shares hit three-year low

Nov. 16, 2012, Montreal - Bombardier shares hit a three year low Thursday on the Toronto Stock Exchange amid several downgrades
from credit ratings agencies.


November 16, 2012
By The Canadian Press

Bombardier stock closed down six per cent, or 20 cents per share, to $2.99 on heavy trading of more than 43 million shares. That was the lowest close since March 2009.

The Standard and Poor's ratings agency downgraded Bombardier Inc.'s long-term corporate rating one notch Wednesday,
following its peers in lowering the plane and train maker's status after a weak earnings report.

S&P said it will lower Bombardier's rating to BB from BB+ due to the company's "significantly lower-than-expected'' cash generation this year as customer advances and operating profit fell amid a weak global economy.

S&P maintained a stable outlook for the company, as it expects stable performance from the company's rail segment and an overall
slight improvement in operating margins.

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But it added that heavy capital spending on Bombardier's CSeries plane, which is currently delayed by six months, will keep the
company's leverage ratio high at least until 2014.

Fitch Ratings earlier lowered the company's debt rating and Moody's shifted its outlook on the company from stable to negative
and lowered its liquidity rating, citing similar reasons.

However, Moody's on Wednesday restored Bombardier's liquidity rating to SGL-2, indicating good liquidity, citing a "near-absence
of current debt maturities.''

But it warned that Bombardier's rating could be downgraded if the CSeries is further delayed or if Bombardier's leverage is not
expected to fall in the next 12 to 18 months.

Montreal-based Bombardier reported weaker than anticipated results and negative free cash flow in the third quarter.

The results announced last week were impacted by a slow recovery in regional aircraft and business jet markets and challenges at
Bombardier Transportation, the company's locomotive and rail car manufacturing unit.

Heavy usage of cash is being driven by high capital spending for several aircraft development programs, notably the CSeries and
Learjet 85.

Bombardier announced last week a six-month delay in the first flight of the CSeries to June, and a corresponding delay to the
delivery of the airplane's smaller model. The larger CS300's delivery schedule is unchanged.