Fitch: Eaton outlook negative

Fitch Ratings said it affirmed Eaton Corp.'s issuer default rating, senior unsecured bank facilities and senior unsecured debt at A and its short-term issuer default rating and commercial paper at F1.

The ratings were removed from Rating Watch negative, and the outlook is now negative.

The affirmation follows the company's recently announced issuance of new equity that is expected to generate $1.43 billion of net proceeds. Eaton plans to use the funds to pay down its bridge facility, including commercial paper backed by the facility that was used to fund the recent acquisitions of Moeller Group and Phoenixtec. The acquisitions totaled nearly $3 billion.

The agency said the removal of Eaton's ratings from negative Rating Watch reflects the resolution of uncertainty surrounding the company's mix of debt and equity used to fund the acquisitions of Moeller and Phoenixtec. Eaton's new equity strengthens its balance sheet and significantly reduces the amount of outstanding debt that was used to fund the acquisitions.

Despite the new equity, leverage remains high for the rating category, Fitch noted.

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