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TEXT-S&P puts Ingersoll-Rand 'BBB+' ratings on watch negative
December 10, 2012 / 9:18 PM / 5 years ago

TEXT-S&P puts Ingersoll-Rand 'BBB+' ratings on watch negative

Overview
     -- Globally diversified industrial manufacturer Ingersoll-Rand Plc 
announced today that it is planning to spin-off its security business to 
shareholders.
     -- The company's financial policy may be somewhat more aggressive as a 
result of this action, and this will likely result in somewhat 
weaker-than-expected credit metrics.
     -- We are placing our 'BBB+' corporate credit and unsecured debt ratings 
on CreditWatch with negative implications. 
     -- The short-term and commercial paper ratings are unaffected.

Rating Action
On Dec. 10, 2012, Standard & Poor's Ratings Services placed its 'BBB+' 
corporate credit and unsecured debt ratings on Ireland-based Ingersoll-Rand 
PLC on CreditWatch with negative implications. The short-term and commercial 
paper ratings are unaffected. 

Rationale
This action results from the potential weaker credit metrics as a result of 
its planned spin-off of its global security business to shareholders. We 
believe that the divestiture of its global security business will still 
support a "strong" business risk profile. However, the loss of considerable 
EBITDA would result in weaker credit metrics on a pro forma basis. We estimate 
that following this transaction credit metrics could be weaker than our 
existing expectations of debt to EBITDA of about 2x and funds from operations 
to total debt of 35% to 40%. The transaction could possibly close within the 
next 12 months.
 
CreditWatch
We plan to review the details of this transaction, including a review of 
financial policy with management. In addition, we plan to review the company's 
strategy, new share repurchase plan, and debt refinancing. Our CreditWatch 
listing could result in a downgrade, an affirmation, or a negative outlook.

Related Criteria And Research
     -- Summary: Ingersoll-Rand PLC, Aug. 7, 2012
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008



Ratings List

Ratings Placed On CreditWatch
                                        To                 From
Ingersoll-Rand PLC
Ingersoll-Rand International Holding Ltd.
Ingersoll-Rand Global Holding Co. Ltd.
Ingersoll-Rand Co. Ltd.
Ingersoll-Rand Co.
 Corporate Credit Rating                BBB+/Watch Neg/A-2 BBB+/Stable/A-2

Trane U.S. Inc.
Ingersoll-Rand International Holding Ltd.
Ingersoll-Rand Global Holding Co. Ltd.
Ingersoll-Rand Co.
 Senior Unsecured                       BBB+/Watch Neg     BBB+

Ratings Affirmed

Ingersoll-Rand Global Holding Co. Ltd.
Ingersoll-Rand European Financial Services PLC
Ingersoll-Rand Co. Ltd.
Ingersoll-Rand Co.
 Commercial Paper                       A-2                

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

Our Standards:The Thomson Reuters Trust Principles.
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