The ratings on Pembroke, Bermuda-based Tyco Electronics Ltd. reflect its leading market share in the connector industry, substantial customer diversity, and adequate operating liquidity. Challenging conditions in several markets, depressed profitability, and weak cash flows offset these strengths. The ratings also reflect Tyco's exposure to legacy tax liabilities from its former parent. Tyco generated $11.4 billion in revenues for the 12 months ended June 2009 versus $14.9 billion for the year-earlier period. The decline includes substantial weakness in component sales to the automotive industry. Operating profitability has declined, with June-quarter EBITDA of $269 million, 11% of sales, versus $728 million for the year-earlier quarter. Trailing-12-month adjusted debt leverage was 2.6x in the June quarter and could rise thereafter as more
