Moody's: Eaton outlook negative

Moody's Investors Service said it affirmed the A2 long-term and P-1 short-term ratings of Eaton Corp. following its plans to acquire two electrical distributors for $2.5 billion.

Details of the expected financing plans were not disclosed but Eaton noted that it would use a combination of cash, debt and equity to finance the acquisitions, the agency said.

The outlook was changed to negative reflecting the expectation of an initial increase in leverage required to finance the deal, substantial execution risk in completing and obtaining financing for the acquisitions and high integration risk upon its completion, Moody's said.

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