Bombardier Inc. stock took a fresh hit Thursday after the Fitch ratings agency downgraded its debt and cut its rating outlook to negative.

Fitch blamed the delay in the CSeries jet and production cuts in other business lines for the downgrade, which rates Bombardier's long-term debt at B, down from B+.

Bombardier stock declined by four per cent to $1.45 on the news. It has slid in the past year from about $3.85 in August 2014.

Fitch pointed to negative free cash flow at the aerospace maker and pointed out the development spending for the CSeries remains high.

At the same time the company has made production cuts fro its Global 5000 and 6000 business jets, which do generate a profit and delayed launch of the Global 7000, which also had profit potential.

Fitch is worried about the company's cash flow, believing it could run low on money in 2016 if it run into further headwinds, such as weak demand in the aerospace business or further challenges in CSeries production.

Too much rides on the CSeries being a success, it says, but Bombardier is operating in a very competitive business.

The ratings agency likes the idea of selling off the train-building portion of Bombardier to raise cash.

"Liquidity would improve if BBD completes a planned initial public offering (IPO) of a minority stake in Bombardier Transportation. Fitch estimates the IPO could generate $1 billion or more of cash proceeds," it said in a research note.

It notes new management that is reviewing the business and planning a transformation intended to improve performance and cash flow.