Moody's may raise AT Holdings

Moody's Investors Service said it placed its ratings of AT Holdings Corp. (corporate family rating of B2), the parent of Argo-Tech Corp., on review for possible upgrade.

The review was prompted by the announcement that Eaton Corp. (long term rating A2, short term rating, Prime-1) will be purchasing AT Holdings for total consideration of $695 million, which includes the assumption of existing debt, the agency said.

Moody's said that the review of AT Holdings' ratings will focus on the probability and nature of support from Eaton Corp.

Moody's said it anticipates that Argo-Tech's 9.25% bonds and bank credit facilities as well as the parent company's senior discount notes carry more restrictive and costly terms than those available to Eaton itself.

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