Fitch downgrades Eaton

Fitch Ratings said it downgraded Eaton Corp.'s issuer default rating to A- from A, senior unsecured bank credit facilities to A- from A, senior unsecured long-term debt to A- from A, short-term issuer default rating to F2 from F1 and commercial paper to F2 from F1.

The outlook was revised to stable from negative.

The downgrade reflects slower-than-anticipated debt reduction following the acquisitions of Moeller and Phoenixtec in early 2008, according to the agency.

Despite Eaton's $1.5 billion of equity issuance that was used to help fund acquisitions in 2008, debt-to-EBITDA ratio was 2.3 times at the end of 2008, materially above typical levels of roughly 1.7x prior to the acquisitions, Fitch noted.

Ratings also incorporate the company's effective cost controls, ability to effectively integrate acquisitions and liquidity, the agency said

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