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Fitch Rates Agilent Technologies' Senior Notes 'BBB'

^{Published on 2010-07-13 11:00:28 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--Fitch rates Agilent Technologies, Inc.'s (Agilent) (NYSE: A) proposed up to $750 million senior notes offering 'BBB'. The net proceeds from the debt issuance will be used to repay a portion of the $1.5 billion of repurchase obligations of the company's wholly-owned subsidiary, Agilent World Trade Inc. (World Trade), which are due in January 2011. The senior notes will be pari passu with Agilent's existing senior unsecured notes and revolving credit facility (RCF). Fitch anticipates the company will retire the remainder of the obligations with available cash and free cash flow.

Fitch currently rates Agilent as follows:

--Issuer Default Rating (IDR) 'BBB';

--Senior unsecured revolving credit facility (RCF) 'BBB';

--Senior unsecured notes 'BBB'.

The Rating Outlook is Positive.

As of April 30, 2010, Fitch estimates cash was approximately $2.8 billion, which is pro forma for the $1.5 billion cash payment associated with the May 14, 2010 closing of the Varian acquisition and includes approximately $1.6 billion of restricted cash related to the Agilent World Trade repurchase obligations. Fitch believes that the $1.6 billion of restricted cash, as well as a substantial amount of Agilent's unrestricted cash, is located overseas and could give rise to tax liabilities upon repatriation. Also supporting liquidity is an undrawn $330 million RCF expiring May 11, 2012, and Fitch's expectations that the company will generate annual free cash flow of more than $500 million.

For more information, please see Fitch's May 21, 2010 press release on Agilent Technologies.

Relevant Criteria

--Corporate Rating Methodology - Nov. 24, 2009;

--Evaluating Corporate Governance - Dec. 12, 2007;

--Liquidity Considerations for Corporate Issuers - June 12, 2007;

--Cash Flow Measures in Corporate Analysis -Amended - Oct. 12, 2005.

Additional information is available at [ www.fitchratings.com ].

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