S&P Global Ratings affirmed all ratings on Pentair Plc, including its corporate credit rating at BBB-, and removed the company from CreditWatch. The outlook is stable.
The rating agency expects the bulk of the approximately $970 million cash that Pentair will receive when its electrical division nVent Electric pays dividends as part of a spinoff transaction to go toward near-term debt repayment.
S&P placed Pentair on CreditWatch with negative implications in May 2017 after the spinoff was announced, believing the move would significantly reduce the company's revenue base and product diversity.
The stable outlook reflects S&P's expectations for modest organic revenue growth over the next 12 to 24 months and relatively stable margins as the company completes cost efficiencies and focuses on higher-margin products. But S&P warned that the spinoff will weaken Pentair's scale and scope against higher-rated capital goods peers.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
