S&P downgrades ADT to junk

Standard & Poor's said it lowered the corporate credit rating on ADT Corp. to BB- from BBB-, along with its short-term rating to B from A-3.

The outlook is stable.

The agency also said it lowered the rating on the senior unsecured notes to BB- from BBB- and assigned a recovery rating of 3 to the notes. The 3 recovery rating indicates 50% to 70% expected default recovery.

The downgrade reflects ADT's revised and more aggressive financial policy, which will increase leverage to a targeted 3x level, S&P said.

The company intends to accelerate growth by pursuing acquisitions with the additional debt while also continuing shareholder returns, the agency said.

The company does have strong brand-name recognition, scale and a leading market position in the residential alarm-monitoring industry, S&P added.

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