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S&P downgrades ITT after breakup

October 31, 2011

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NEW YORK—Standard & Poor's Ratings Services downgraded ITT Corp. by two notches on Monday after the technology provider spun off two of its business segments into separate companies.

S&P cut ITT's long-term corporate credit rating to "BBB-" and assigned the White Plains, N.Y., company a "stable" outlook.

ITT sells parts and services to companies in industries including aerospace, energy and transportation. On Monday, it completed the spin-off of its water-management business into Xylem Inc. and its defense segment into Exelis Inc.

The moves will leave ITT with about $2 billion in annual revenue, S&P said. Last year, it had $11 billion in sales.

S&P also lowered ITT's short-term credit rating to "A-3" from "A-2" and gave an "A-3" rating to its new $500 million commercial-paper program.

The ratings agency said, however, that ITT continues to have well-known brands and good aftermarket sales in niche markets with high profit margins. It has a chance to grow in emerging markets, S&P said.

ITT shares rose $1.24, or 2.3 percent, to $46.23 in afternoon trading.