Tyco anticipates credit upgrade on CIT split

By Ronda Fears

Nashville, Tenn., March 19 - Tyco International Ltd. chief financial officer Mark Swartz said the company expects its credit ratings to be upgraded at least to the BBB+ level when it separates from its financing unit, CIT Group Inc.

"The separation alone does allow us to receive an upgrade," Swartz said, "which gives us more flexibility within the credit markets."

In a weekly conference call with investors, which continues to primarily address persistent questions about its accounting practices, Swartz said Standard & Poor's has indicated that it will upgrade Tyco's credit rating when it sells or spins off CIT to a minimum of BBB+.

Fitch said in a statement Tuesday that it also views the plan favorably, at least for CIT.

S&P rates Tyco senior debt to BBB and put the credit on watch, developing, in early Feburary.

Moody's rates Tyco senior debt at Baa1and put the credit on review, uncertain, in late January.

CIT was holding a separate conference call with fixed income investors on Tuesday to discuss the progress of separating from Tyco and its outlook for second quarter. CIT executives said the spin-off is on track for May, ahead of Tyco's target to complete the divestiture by mid-year.

Tyco shares closed Tuesday up 75c to $34.50. The 0% convertibles were mixed, with the 2020 issue up 0.25 point to 67 bid, 67.5 offered and the 2021 issue off 0.125 point to 51.625 bid, 52.125 offered.

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