S&P downgrades Eaton

Standard & Poor's said it lowered Eaton Corp.'s long-term corporate credit and senior unsecured debt ratings to A- from A and its short-term and commercial paper ratings to A-2 from A-1.

The outlook is stable.

The agency said the downgrade reflects its view that amid weak end-market conditions, Eaton's credit measures are unlikely to return in the near term to levels expected for the A rating. Credit protection measures have been stretched as a result of heavy acquisition spending, S&P said, and the company is experiencing weakening demand in its automotive, truck and hydraulics segments.

The ratings on Eaton continue to reflect the company's strong business risk profile and its good end-market, geographic and product diversity, the agency said.

Offsetting these factors are its exposure to some cyclical and competitive markets, its acquisitive growth strategy and its postretirement benefit liabilities, according to S&P.

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