Moody's may cut Tyco

Moody's Investors Service said it placed Tyco International Finance SA's A3 senior unsecured and prime-2 commercial-paper ratings under review for possible downgrade.

The company's obligations are fully guaranteed by its parent, Tyco International Ltd.

The action follows news of Tyco's board approval to separate into three publicly traded entities, Moody's said.

This would be accomplished by distributing to shareholders through a stock dividend the ownership of two separate corporations, ADT North America residential security and flow control and leaving commercial fire protection and security in the existing Tyco entity, the agency said.

Although Tyco has expressed its view that all three companies will have investment-grade characteristics, the review considers the potential that the separation of the businesses could result in currently outstanding debt being rated below the A3 level, Moody's said.

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