Moody's rates Stanley Works convertible A2

Moody's Investors Service said it assigned A2 ratings to Stanley Works' $300 million senior mandatory convertible debt units due 2012 and $200 million senior unsecured notes due 2010 and affirmed the company's A2 senior unsecured rating and P-1 commercial paper rating.

The outlook is stable.

These notes are being issued to refinance the bridge facility used to finance the company's acquisition of HSM Electronic Protection Services, Inc.

The agency said Stanley Works' ratings reflect the company's leading market share and strong brand recognition in its consumer and industrial tools businesses, its commitment to product innovation, diversification and continued growth across all three of its operating segments, its moderate leverage and its strong cash flow generating capability throughout the business cycle.

Conversely, Stanley's ratings also capture its cyclical business profile, its sizeable customer concentration risks, its vulnerability to input cost inflation and its increasing reliance on hybrid debt securities to manage its capital structure, Moody's said.

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