Fitch Expects to Rate Tyco International's New $500MM Sr Unsecured Notes at 'BBB+'

The existing ratings for TYC and TIFSA are as follows:

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

--Senior unsecured revolving credit facilities at 'BBB+';

--Senior unsecured notes at 'BBB+';

--Short-term IDR at 'F2'

--Commercial Paper at 'F2'.

The ratings affect approximately $4.3 billion of debt outstanding at Sept. 28, 2008. The Rating Outlook is Stable.

The ratings incorporate Tyco's conservative financial policies, its focus on further strengthening its operating capabilities, solid free cash flow, and well-established competitive positions in its global end-markets. Tyco has completed a large part of its realignment and restructuring efforts that include the consolidation of numerous manufacturing locations and the divestiture of Earth Tech and other non-core businesses. As a result, margins have improved across much of Tyco although certain parts of the fire, security and flow control businesses require further streamlining. The company is better positioned than in the past to respond to an increasingly challenging economic environment, and it has ample financial flexibility that reflects the company's substantial proportion of recurring revenue and its control over discretionary spending. Modest acquisition spending, together with proceeds from divestitures, has helped to maintain stable debt levels despite $1 billion of share repurchases in fiscal 2008.

The most significant rating concerns for Tyco were resolved earlier in 2008 when Tyco settled separate disputes with shareholders and bondholders. Other, ongoing rating concerns include litigation surrounding tax reporting, alleged violations of the Foreign Corrupt Practices Act and antitrust laws, environmental and asbestos liabilities, and government investigations of governance and accounting issues. A portion of these contingent liabilities represent legacy activities and are shared with Covidien and Tyco Electronics.

As of Sept. 28, 2008, Tyco's liquidity is supported by cash balances of $1.5 billion and availability under $1.75 billion of bank revolvers that mature no earlier than 2011. These sources of liquidity were offset by $555 million of short-term debt and current maturities of long-term debt. In addition to on-balance sheet debt of $4.3 billion, Tyco had operating leases and a receivables securitization program that was utilized for $65 million, both of which were reflected in the company's total adjusted debt-to-EBITDAR ratio of 2.0 times (x) at Sept. 28, 2008.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

SOURCE: Fitch Ratings

Fitch Ratings Eric Ause, CFA, +1-312-606-2302 (Chicago) Craig Fraser, +1-212-908-3010 (New York) Media Relations: Cindy Stoller, +1-212-908-0526 (New York) cindy.stoller@fitchratings.com