S&P rates ADT notes BBB

Standard & Poor's said it assigned a BBB corporate credit rating to ADT Corp., along with a BBB rating to its proposed $2.5 billion senior notes.

The proceeds will be used to fund a payment to Tyco.

The outlook is stable.

The stable outlook reflects ADT's clear market leadership position and an expectation that its recurring revenue model will result in solid free cash flow generation, S&P said.

Tyco will initially guarantee the notes until it completes the spin-off, which it expects to do in September, S&P said.

This transitional guarantee of the notes by Tyco does not factor into the ratings because it would only come into play if the spin-off is not completed, the agency said.

The ratings reflect the company's satisfactory business risk profile, characterized by its leading market position and strong brand recognition, S&P said.

ADT's presence in the highly competitive U.S. security alarm monitoring industry with its high customer attrition rates somewhat offset these business strengths, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.