Moody's rates Emerson Electric notes A2

Moody's Investors Service said it assigned an A2 rating to Emerson Electric Co.'s new unsecured notes due 2025 and 2029.

The issuance does not impact other ratings of Emerson, including the A2 senior unsecured or P-1 short-term ratings.

The outlook is stable.

The ratings reflect the company's sizable and broadly diversified revenue base, Moody's said, and its leading market positions among its largest product offerings.

The ratings are also supported by the company's strong EBITA margins of close to 20% and expectations for free cash flow generation in excess of $1 billion in 2019, the agency said.

Moody's said it expects the company will continue to manage its balance sheet conservatively and maintaining its debt-to-EBITDA ratio of less than 2 times.

The ratings also reflect key risks, including company's exposure to highly cyclical end-markets, in particular the energy markets, the agency said.

Although transformative strategic activity is unlikely, an increase in the pace or size of acquisitions would weigh negatively on the company's credit profile, given the potential for increased debt load and heightened financial and integration risks, Moody's said.

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