Fitch Affirms SPX at 'BB+'; Outlook Stable

CHICAGO--(Business Wire)--
Fitch Ratings has affirmed SPX Corporation's (SPX) ratings as
follows.

--Issuer Default Rating (IDR) 'BB+';

--Senior secured bank debt 'BB+';

--Senior unsecured debt 'BB+'.

At March 29, 2008 SPX had approximately $1.6 billion of debt
outstanding. The Rating Outlook is Stable.

The ratings consider SPX's geographic and product diversification,
solid demand in many of its infrastructure and energy markets, and
consistent execution of its operating and financial strategies. In
addition, the company has appropriate levels of liquidity and cash
flow for the rating category. SPX's financial leverage has been higher
than normal since late 2007 when the company spent $524 million to
acquire APV, a maker of process equipment for food, beverage and
pharmaceutical markets. The acquisition, together with other
transactions, has supported SPX's expansion outside the U.S. which now
represents about half of total revenue. SPX's stated policy is to
maintain gross debt/EBITDA within a range of 1.5 times (x) to 2.0x, as
defined in its bank agreement. At March 29, 2008 gross debt/EBITDA was
2.2x. The ratio is somewhat understated when compared to unadjusted
measures used by Fitch. Additional acquisitions or share repurchases
are expected to resume once SPX returns to its targeted leverage
range, possibly by the end of 2008.

Improving operating results reflect the impact of SPX's focus on
productivity, cost controls, the integration of its information
systems, and other initiatives. The company is disciplined about
acquiring or divesting businesses to support its strategy of expanding
its infrastructure, process equipment and diagnostic tools platforms.
The APV acquisition expanded SPX's existing process equipment business
although its margins are well below those in the rest of SPX's Flow
Technology segment. SPX plans to spend $60 million-$80 million of cash
over three years to restructure the APV business and raise its margins
as part of its integration with SPX.

Rating concerns include occasional increases in leverage related
to acquisitions, integration risk at acquired businesses, competitive
end-markets, and weak demand from North American automotive customers.
Partly as a result of restructuring costs, SPX's free cash flow is
anticipated to be flat in 2008 despite sales and margin growth at
existing businesses. Free cash flow will also be affected by
additional capital expenditures to expand SPX's production capacity
and a program to further integrate and upgrade its information system.
These expenditures could reasonably be expected to return to more
normal levels fairly quickly, however, giving SPX additional
flexibility after 2008 with respect to discretionary spending.

SPX issued $500 million of seven-year senior unsecured notes in
December 2007 to help fund the purchase of APV. As a result, total
debt increased to $1.6 billion as of March 29, 2008 from less than $1
billion one year earlier. SPX also has a $750 million term loan which
amortizes through 2012 and represents nearly all of its scheduled debt
maturities during the next five years. Liquidity at March 29, 2008 was
supported by cash balances of $384 million and by approximately $241
million of net availability under a five-year secured bank facility.
The level of liquidity reflects the seasonality of SPX's free cash
flow which typically is strongest in the second half of the year.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
Eric Ause, +1-312-606-2302 (Chicago)
Cheryl Peterson, +1-312-606-2309 (Chicago)
Media Relations:
Sandro Scenga, +1-212-908-0278 (New York)

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