Fitch Comments on Tyco's Agreement to Settle Class Action Litigation

Business Wire, May 16, 2007

CHICAGO -- Fitch Ratings' Evolving Rating Watch for Tyco International Ltd. (Tyco) remains unchanged following the company's announcement yesterday about an agreement to settle most of the security class action lawsuits involving its stock and the conduct of former management of the company. The proposed settlement calls for a cash payment of nearly $3 billion and is subject to approval by the court. The impact of the settlement on Tyco's three successor companies would presumably be governed by the terms of the Separation and Distribution Agreement as described in Tyco's SEC filings. The settlement would reduce uncertainty surrounding the amount of contingent liabilities to be shared after Tyco's separation, helping to mitigate the negative impact on Tyco's balance sheet.

Tyco has not yet disclosed how it plans to fund the settlement but, as Fitch has indicated in the past, the ratings incorporate Tyco's capacity to absorb a sizeable settlement. As Tyco approaches the date of its planned separation, Fitch expects to review the impact of the litigation settlement, any adjustments to expected financial policies and debt structure, and the final terms of the separation.

Fitch currently rates Tyco as follows:

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

--Senior unsecured bank credit facilities 'BBB ';

--Senior unsecured notes 'BBB ';

--Short-term debt 'F2'.

Fitch's expected ratings for the three successor companies following Tyco's planned separation are described in Fitch's press release dated April 24, 2007 and titled 'Fitch to Rate Tyco's Three Post-Separation Companies: Covidien 'A'; Electronics 'BBB '; Tyco 'BBB" which can be found on the Fitch Ratings' web site at www.fitchratings.com.

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.