S&P: Tyco International Holding S. a.r. l.'s Proposed $1 Billion Commercial Paper Program Assigned 'A-2' Short-Term Rating
All of our other ratings on TSARL are unchanged.
The 'A-2' short-term rating reflects the combination of our adequate assessment of JCI PLC's liquidity and our long-term 'BBB+' corporate credit rating on the company.
Tyco International PLC completed its merger with Johnson Controls Inc. on Sept. 2, 2016, and changed its name to Johnson Controls International PLC. We believe that the combined company will be a strong global player with leading market positions (typically No. 1 or No. 2) across the building efficiency (i. e., controls and heating, ventilation, and air conditioning), fire, security, and energy storage markets. Pending the spin-off of JCI's automotive seating business, Adient, we believe that the combined entity will benefit from decreased cyclicality, allowing management to focus on more attractive end markets. We believe that the company will maintain moderate leverage, including adjusted debt-to-EBITDA of 2x-3x, and generate solid free operating cash flow of at least $1 billion or more annually.
For the latest corporate credit rating rationale, please see our research update on Johnson Controls International PLC published Aug. 25, 2016, on RatingsDirect.