Moody’s applies A2 to Emerson Electric notes

Moody's Investors Service said it assigned an A2 rating to Emerson Electric Co.'s $1 billion of senior unsecured notes.

The company's short-term rating remains at Prime-1.

The outlook is stable.

Proceeds will be used primarily to repay outstanding commercial paper.

Moody’ said the A2 long-term rating reflects Emerson's highly competitive position in its core businesses, the broad product and geographic diversification it enjoys, and the strong cash generation and return measures supported by its operations.

In addition, the company's financial flexibility is supported by modest leverage and a strong liquidity profile.

For the 12 months through December 2014, Emerson's key credit metrics (reflecting Moody's standard adjustments) included: EBITA margin – 19.4%; EBITA/interest – 12.9 times; debt/EBITDA – 1.8 times; EBITA/average assets – 18%; and free cash flow – $1.6 billion.

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