TEXT - S&P rates Pentair Finance S.A.
Nov 19 - Standard & Poor's Ratings Services said today it assigned its 'BBB' issue-level rating to Pentair Finance S.A.'s proposed senior unsecured notes. The rating is the same as the corporate credit rating on Pentair Finance S.A.'s parent company, Pentair Ltd. (Pentair). The company announced that it expects to use the proceeds to repay commercial paper and for general corporate purposes. The company also announced an exchange offer for notes issued by subsidiary Pentair Inc. The proposed notes will be issued under rule 144A and be guaranteed by Pentair. The ratings reflect Pentair's "satisfactory" business risk profile, which reflects its leading market position (No. 1 or 2 in most of its end markets) and good geographic diversity (more than half of its revenues generated outside of the U.S.), offset by its continued presence in cyclical and fragmented end markets. Pro forma for its recent merger with Tyco International Ltd.'s (A-/Stable/A-2) flow control business, we expect the company to generate about $7.7 billion of revenues in 2012 in three segments: water and fluid solutions (about 45% of revenues), flow control (30%), and equipment protection solutions (25%). Cost synergies should allow the company to maintain operating margin of about 15%, which should result in leverage metrics within our expectation of 2.0x-2.5x for the rating. RELATED CRITERIA AND RESEARCH -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012 -- Research Update: Pentair Inc. Ratings Raised, Withdrawn After Merger; Pentair Ltd. Assigned 'BBB' Rating, Outlook Stable, Sept. 28, 2012 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 RATINGS LIST Pentair Ltd. Corporate Credit Rating BBB/Stable/A-2 New Rating Pentair Finance S.A. Senior Unsecured Sr unsecd notes BBB