What are the possible implications for the company’s credit rating and financing costs?

Credit‑rating outlook

The Gross Law Firm’s notice flags a potential securities‑class‑action that could expose Lockheed Martin (LMT) to a sizable contingent liability. Rating agencies typically factor legal risk into their “risk‑adjusted cash‑flow” models, especially for a company whose balance sheet is already leveraged by a large, ongoing defense‑spending pipeline. If the case proceeds to a settlement or judgment that materially dents earnings or erodes cash reserves, agencies may view the firm’s debt‑service capacity as weakened and could issue a “negative outlook” or a modest downgrade (e.g., from AA‑ to AA). Even without a downgrade, the “legal‑risk” tag often prompts agencies to tighten their credit‑rating criteria, which translates into a higher risk premium on any new debt issuance.

Financing‑cost impact

Higher perceived legal risk will be baked into the yield spreads on LMT’s corporate bonds and commercial‑paper programs. Investors will demand a premium to compensate for the added uncertainty, so the cost of borrowing could rise by 15–30 bps on short‑term paper and 30–60 bps on longer‑dated senior notes, depending on the severity of the potential exposure. In the short term, the market may also see a modest sell‑off in LMT’s existing debt as holders re‑price the credit risk, widening bid‑ask spreads. For equity traders, the news adds a downside catalyst: expect a modest dip in the stock (technical support around the 5‑month moving average) and monitor the bond market for any upward movement in yields that could signal a broader re‑assessment of the company’s financing costs.