Monday February 4, 3:47 pm Eastern Time
S&P cuts Tyco ratings,says satisfied on accounting
<<<NEW YORK, Feb 4 (Reuters) - Standard & Poor's on Monday cut several ratings for Tyco International Ltd. (NYSE:TYC - news) and its Tyco Capital Corp. finance arm, and may change the ratings again, but said the conglomerate has answered questions about its accounting practices ``to Standard & Poor's satisfaction.''
The downgrades follow Bermuda-based Tyco's announcement on Monday to tap $5.9 billion of credit lines to pay down $4.5 billion of maturing commercial paper. That's an unusually large drawdown for an investment-grade company.
S&P cut Tyco's senior unsecured debt rating three notches to ``BBB,'' an investment grade two notches above ``junk'' status, from ``A,'' and its commercial paper rating two notches to ``A-3,'' one notch above junk, from ``A-1.'' It cut Tyco Capital's senior unsecured debt rating two notches to ``A-minus'' from ``A-plus.''
S&P said Tyco appears to have lost the ``free access to capital markets'' enjoyed by ``single-A'' companies, but has enough available funds to address its liquidity needs over the ``next several months.'' However, it said, ``external financing would likely be required to meet debt maturities in 2003.''
S&P said it assumes Tyco ``will eventually regain access to capital markets,'' but could lower the ratings further if this changes. Tyco shares traded late Monday on the New York Stock Exchange at $29.00, down $7.86, or 21.3 percent. >>> |
