Fitch lowers ADT

Fitch Ratings said it downgraded the ratings of ADT Corp., including the company's issuer default rating to BBB from BBB+. The outlook remains stable.

The agency said the downgrade reflects ADT's recently announced $2 billion share repurchase program, which will be funded by debt and free cash flow.

According to Fitch, ADT expects to incur $650 million to $900 million of incremental debt in 2013 and return approximately $900 million to $1 billion to shareholders in the form of share repurchases and dividends.

Based on the projected share repurchases and debt levels, Fitch said it projects ADT's leverage will increase from approximately 1.6x during fiscal 2012 to about 2x for fiscal 2013 and 2014. Fitch had originally expected ADT to maintain leverage at around 1.5x and interest coverage above 15x.

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