Fitch rates Eaton loans BBB+

Fitch Ratings said it assigned a rating of BBB+ to Eaton Corp. plc as an eligible borrower under three existing bank facilities totaling $2 billion.

Fitch also said it assigned the company a short-term issuer default rating of F2 and a commercial-paper rating of F2. The company has an issuer default rating of BBB+.

Eaton Corp. has an issuer default rating of BBB+, senior unsecured bank credit facilities rating of BBB+, senior unsecured long-term debt rating of BBB+, short-term issuer default rating of F2 and commercial-paper rating of F2.

The outlook is negative.

The ratings consider the company's increased debt and increased leverage associated with the Cooper acquisition, Fitch said.

The acquisition price was about $11.8 billion, not including about $1.1 billion of debt at Cooper as of the acquisition closing date. Eaton funded the transaction with equity, available cash and $4.9 billion of senior unsecured notes issued in November, the agency said.

The negative outlook reflects the potential for sustained high leverage if Eaton is unable to realize expected synergies following the acquisition of Cooper, Fitch said, or if financial results are pressured by a slowdown in Eaton's electrical and other industrial end markets.

Eaton has taken steps to reduce its cost structure in the truck and international electrical businesses, which should mitigate the negative impact of volume pressure on margins, the agency said.

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