Moody’s rates Hubbell notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to Hubbell Inc.’s senior unsecured notes due 2028.

Proceeds, along with term loan borrowings along with revolver borrowings and/or commercial paper issuance, will be used to fund the $1.1 billion acquisition of Aclara Technologies LLC.

Hubbell's other ratings are unaffected, including the Prime-2 short-term rating.

The outlook is stable.

“With the debt-financed acquisition of Aclara, Hubbell's leverage will increase significantly. But benefits from the Aclara acquisition and expectations for strong free cash flows on steady revenue growth and margins will offset the negative impact of leverage on Hubbell's risk profile,” Moody’s said in a news release.

“On close of the acquisition, debt to EBITDA, currently at approximately 2.2 times, will rise to nearly 3.5 times debt to EBITDA, which is high compared to other issuers with similar risk profile also at the Baa1 rating category.”

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