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S&P: Motorola kept on positive watch
Standard & Poor's said its BB+ corporate credit rating on Motorola Inc. is unchanged and remains on Creditwatch positive, where it was placed on Sept. 2.
"When Motorola effects its separation, expected on Jan. 4, 2011," said S&P credit analyst Lucy Patricola, "we will raise its corporate credit rating on the company to BBB from BB+ and assign a stable outlook."
According to S&P, the higher rating will incorporate its view that the business risk profile of the new Motorola Solutions is satisfactory based on the stability of its markets, the high priority of its public safety solutions and the high barriers to entry that protect its competitive position.
The agency said it calculates that leverage at separation will be high for the rating, with adjusted debt to EBITDA in the mid- to high-3x area, but expect the company to reduce debt and debt-like obligations by about $2.25 billion by the end of 2012.
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