Moody's: Tyco unaffected

Moody's Investors Service said that Tyco International Ltd.'s announcement of an agreement to settle most of the securities class action lawsuits involving Tyco stock and the conduct of former management does not affect the long-term ratings or developing outlook assigned to Tyco or its subsidiaries, including Tyco International Group SA.

The settlement requires Tyco to establish a $2.975 billion cash settlement fund for payment of plaintiff's claims in the consolidated securities class action cases. The settlement is subject to court approval and the participation of plaintiffs holding a significant percentage of Tyco shares in the class.

The agency said it believes that reaching a settlement reduces uncertainty surrounding the timing and amount of settlements from legacy legal matters and that it expects Tyco to fund the settlement with some combination of existing cash, cash flow and borrowings.

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