Fitch says it may cut ratings on Anixter

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Fitch Ratings says it may downgrade credit ratings on Anixter on lower global IT spending

NEW YORK (Associated Press) - Fitch Ratings said Wednesday it may cut its ratings on Anixter International Inc. in the near future, saying the communications parts distributor could be affected by lower spending in the information technology sector.

The credit ratings agency assigned a negative outlook for its ratings on Anixter, meaning a downgrade could be forthcoming. It affirmed its "BB+" issuer default rating and its "BB-" senior unsecured debt rating on the company.

It also affirmed its "BB+" issuer default rating, senior unsecured notes rating and senior unsecured bank credit facility rating on subsidiary Anixter Inc. All the ratings are non-investment, or "junk," grade.

Fitch said lower global IT spending will depress sales of Anixter products, weakening profitability and its ability to buy back shares and make acquisitions.

In addition, the Glenview, Ill., company has "significant and unhedged" exposure to copper prices, the Canadian dollar and the euro, all of which should weaken profitability and revenue over the next several quarters given their decline in value, Fitch said.

Fitch also said the company is also facing reduced liquidity due to recent short-term borrowings, and also said it is at risk due to its depressed asset prices.

Shares of Anixter added 76 cents, or 3 percent, to $26.30 in morning trading Wednesday. The stock is down 59 percent so far this year.