S&P puts Tyco Intl on "negative" watch

Sep 20, 2011 - S&P on Monday placed all of its ratings on US security, fire protection, electrical and other industrial products supplier Tyco International Ltd (NYSE:TYC) and its finance unit, Tyco International Finance SA, on "negative" credit watch.

The downgrade rating risk hangs over the A- long-term corporate credit rating, senior unsecured debt ratings and the A-2 commercial paper (CP) ratings of the company.

The listing was triggered by the news that Tyco was planning to separate itself into three stand-alone companies, subject to shareholder approval. The company will retain its commercial security and fire-protection operations and spin off its Flow Control business and ADT North American residential security business.

"At this time, we believe there is some risk that Tyco, or any of the proposed individual firms, will not have a business risk profile and capital structure that can support the existing 'A-' rating," said Standard & Poor's credit analyst Gregoire Buet.

The current rating reflects the company’s "strong" business risk profile, which is underpinned by its well-diversified products and end markets, and wide geographic coverage.

The agency will resolve the "negative" credit watch after more clarity on the proposed transaction and its effect on the company's business and financial profiles.

Rating agency website: www.standardandpoors.com

Choose your newsletter by Renewables Now. Join for free!