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Bond Market News
Rolls Royce Upgraded to Baa1 by Moody’s
November 21, 2025
Rolls-Royce plc was upgraded by a notch to Baa1 from Baa2 by Moody’s. The upgrade reflects the company’s strong operating performance, broad growth prospects, and commitment to a conservative financial policy focused on maintaining balance sheet strength. It said that Rolls-Royce’s post-pandemic recovery has been amplified by the success of its extensive transformation programme, which has significantly boosted profitability, particularly in the Civil Aerospace division, where operating profit is expected to reach ~£2bn ($2.6bn) in 2025. As per Moody’s, improved service contract terms are expected to support earnings in the long term for the company. Moody’s expects Rolls-Royce to achieve its medium-term profit targets by end-2026, earlier than the management’s guidance. Rolls-Royce has maintained a net cash position since 2024, repaid additional debt in 2025, and is expected to keep adjusted gross debt-to-EBITDA around 1x through 2027. As of end-June, the company had £8.3bn ($10.9) available in liquidity, including £5.8bn ($7.6bn) cash and an undrawn £2.5bn ($3.3bn) revolving credit facility. Earlier this year, the company was upgraded by both Moody’s and Fitch.
Its dollar bonds traded stable with its 5.75% 2027s at 102.7, yielding 4.1%.
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