S&P rates Parker-Hannifin notes A

Standard & Poor's said it assigned an A rating to Parker-Hannifin Corp.'s (A/stable/A-1) proposed issuance of $300 million of senior unsecured notes due 2022.

Proceeds will be used to repay upcoming maturing debt. These notes contain a change-of-control provision.

"The ratings on Parker-Hannifin reflect its strong business position as a global leader in the manufacture of motion-control products serving industrial and aerospace markets," S&P analyst John Sico said in a statement.

"The ratings also reflect the company's modest financial risk profile which is characterized by its conservative financial policy."

Financial leverage up to now has been hampered by the past recession and underfunding of its pensions, the agency said. The company's adjusted debt-to-EBITDA ratio was 2.1x as of June 30, compared with expectations for the rating of less than 2x.

Still, despite the recession, Parker-Hannifin generated strong free cash flow, which was nearly 40% of total adjusted debt in the past fiscal year, the agency noted.

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