Fitch downgrades ADT

Fitch Ratings said it downgraded ADT Corp.'s issuer default rating to BBB- from BBB, along with its revolving bank credit facility to BBB- from BBB, senior unsecured debt to BBB- from BBB, short term issuer default rating to F3 from F2 and commercial-paper rating to F3 from F2.

The outlook remains stable.

The downgrades reflect the change in management's leverage target of 3x in place of its current leverage target of 2x, Fitch said.

The ratings consider the company's strong brand recognition, national footprint and leading market position, recurring revenue base and sustainable free cash flow generation, Fitch said.

Concerns include emerging competition from non-traditional security service providers, risk associated with operating as an independent public company and contingent liabilities related to its spin-off from Tyco International, Ltd., the agency said.

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