Rolls-Royce downgraded to junk by S&P

Rolls-Royce has lost its investment-grade rating — held for the past 20 years — after Standard & Poor’s on Thursday downgraded the company to junk status because of “prolonged weak profitability” and expectations of materially lower cash flow from its engine service contracts. The downgrade is a severe blow to the aero-engine company, which only last week announced plans to cut 9,000 jobs, mainly from its civil aerospace division. It could also hit profitability of future long-term service contracts, as the perceived risk for customers of striking multiyear deals would increase.