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Fitch cuts Hubbell; rates notes, loan A-
Fitch Ratings said it downgraded Hubbell Inc.’s long-term issuer default rating to A- from A and short-term issuer default rating to F2 from F1.
The outlook is stable.
The agency also assigned a rating of A- to Hubbell's planned issuance of 10-year senior unsecured notes and $500 million five-year term loan A.
Proceeds, together with commercial paper borrowings, will be used to fund Hubbell's planned acquisition of Aclara Technologies LLC from an affiliate of Sun Capital Partners, for $1.1 billion.
Fitch's actions affect $1.1 billion of debt outstanding as of Sept. 30, 2017.
“The downgrade reflects an expected increase in financial leverage offset in part by the strategic benefits from the acquisition of Aclara, which is expected to close in Q1'18,” the agency said in a news release.
“The planned issuance of $1.1 billion of new debt to fund the transaction will cause debt/EBITDA to increase to around 3x from 1.6x as of Dec. 31, 2017.”
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