Moody's cuts Stanley Black & Decker

Moody's Investors Service said it downgraded Stanley Black & Decker, Inc.'s senior unsecured ratings to Baa3 from Baa2 and the company's junior subordinated notes to Ba1 from Baa3. The agency also trimmed the senior unsecured rating assigned to Black & Decker Holdings, Inc., an intermediate holding and finance company for subsidiaries of Stanley and guaranteed by Stanley, to Baa3 from Baa2. The outlook is changed to stable from negative.

"Despite Stanley's cost savings and transformational initiatives, operating performance will remain weak relative to higher rated peers, as the current demand environment inhibits a quick recovery," according to Peter Doyle, a Moody's vice president and senior analyst, in a press release.

"Further, financial leverage remains elevated, and it is likely that a significant amount of debt reduction must now come from asset sale proceeds versus previous expectations of all debt reduction from cash flow," added Doyle.

The improved outlook reflects the view that management continues to realign the company's cost structure and that its performance is improving, the agency said.

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