Fitch to rate Eaton notes A-

Fitch Ratings said it expects to assign a rating of A- to Eaton Corp.'s $500 million of five- and 10-year fixed-rate senior unsecured notes.

Eaton has an issuer default rating at A-, senior unsecured bank credit facilities at A-, senior unsecured long-term debt at A-, short-term issuer default rating at F2 and commercial paper at F2.

The outlook is stable.

Proceeds will be available to repay existing debt, including $250 million of notes scheduled to mature in August 2009.

Eaton's ratings were recently downgraded one notch, reflecting slower-than-anticipated debt reduction following large acquisitions in 2008, the agency noted.

Despite Eaton's $1.5 billion of equity issuance that was used to help fund the acquisitions, a difficult economy is pressuring the company's financial results and contributing to leverage measures that remain above the company's historical levels, Fitch said.

At Dec. 31, debt-to-EBITDA ratio was 2.3 times compared with typical levels of roughly 1.7x before the acquisitions.

Ratings are supported by the company's solid operating profile and financial flexibility, the agency said.

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