S&P lowers Harris Corp.

Standard & Poor’s said it lowered its corporate credit rating and issue-level ratings on Harris Corp. to BBB- from BBB+ and removed it from CreditWatch, where S&P placed it with negative implications on Feb. 6. At the same time, S&P lowered the commercial paper rating to A-3 from A-2.

The outlook is stable.

“We based our downgrade primarily on our revision of Harris’ financial risk profile to ‘significant’ from ‘modest,’ reflecting S&P’s adjusted leverage, pro forma for the acquisition of Exelis Inc., near the mid-3x area and funds from operations (FFO) to debt near the low-20% area,” said S&P credit analyst Andrew Chang in a news release.

“The rating also reflects our view of the company’s transition risk associated with the acquisition, partly offset by the increased scale and end-market diversity that Exelis will provide.”

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