Fitch Ratings has reaffirmed the long-term and short-term investment-grade credit ratings of Tyco International Ltd. (TYC) and its subsidiary. The ratings agency affirms Tyco’s IDR at BBB+, its senior unsecured revolving credit facilities at BBB+, its senior unsecured notes at BBB+, its short-term IDR at F2 and its commercial paper at F2.

The ratings impact approximately $4.3 billion of outstanding debt as of Sep 25, 2009.

Fitch raised Tyco’s rating outlook to positive from stable. It is possible for Fitch to upgrade Tyco’s ratings if it further reduces its legal liabilities and strengthens its balance sheet as the economy recovers.

The company also announced that its Flow Control business has acquired two Brazilian valve companies in a move to expand its product and service offerings in Brazil and South America.

Tyco Flow Control acquired Hiter Industria e Comercio de Controle Termo-Hidraulico Ltda (Hiter), a leading privately held Brazilian valve manufacturer, and took full ownership of an existing joint venture that Tyco Flow Control had with Valvulas Crosby Industria e Comercio Ltda. The two businesses had combined revenues of approximately $66 million in 2008.

Tyco International Ltd. provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products to customers worldwide. The company operates in five segments: ADT Worldwide, Flow Control, Fire Protection Services, Electrical and Metal Products, and Safety Products. The Flow Control segment designs, manufactures, sells and services valves, pipes, fittings, valve automation and heat tracing products for the oil, gas and other energy markets along with general process industries, and the water and wastewater markets. Major competitors are Honeywell International (HON) and United Technologies Corporation (UTX).

We currently have a Neutral recommendation on TYC.

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