ADP Stripped of Top AAA Ratings on Spinoff of Auto-Dealer Unit

Automatic Data Processing Inc., the payroll-and-benefits provider that said it’s spinning off its auto-dealer services unit, was stripped of its top AAA credit ratings by Standard & Poor’s and Moody’s Investors Service.

S&P cut its grade two levels to AA, citing ADP’s plan to use at least $700 million of proceeds from the tax-free spinoff to repurchase shares. Moody’s lowered its ranking one step to Aa1, saying the diminished scale and variety of ADP’s products increases the company’s credit risk.