Fitch cuts Cardinal Health

Fitch Ratings said it downgraded Cardinal Health Inc.'s issuer default rating to BBB from BBB+, unsecured bank debt to BBB from BBB+ and senior unsecured debt to BBB from BBB+ in anticipation of its Aug. 31 spinoff of CareFusion Corp.

The short-term issuer default rating is F2.

The outlook is stable.

Ratings reflect the transformation of the company's post-spinoff business model to one that is heavily focused on distribution with manageable capital expenditure requirements and relatively reliable demand for its products and services, the agency said.

The company has adequate liquidity, pays moderate dividends and is expected to reduce debt once the spinoff is completed, the agency noted.

Cardinal Health is expected to operate within a total debt-to-operating EBITDA ratio below 1.5 times, Fitch said.

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