Fitch applies BBB- to ADT notes

Fitch Ratings said it assigned a BBB- rating to ADT Corp.'s proposed offering of about $1 billion of senior unsecured notes due 2021.

The new issue will be equal in right of payment with all other senior unsecured debt.

Net proceeds from the notes issuance will be used for general corporate purposes, which will include the repayment of borrowings under the revolving credit facility and share repurchases.

The outlook is stable.

Fitch said ADT's ratings and outlook reflect the company's strong brand recognition, its national footprint and leading market position, recurring revenue base, sustainable free cash flow generation and solid liquidity.

Concerns include emerging competition from non-traditional security service providers, risk associated with operating as an independent public company and contingent liabilities, particularly tax liabilities, related to its spin-off from Tyco International, Ltd.

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