12:14 AM
admin
Founder Michael Dell and private equity firm Silver Lake Partners have agreed to buy Dellin a $24.4 billion deal that will load debt onto the PC-maker, and Standard & Poor’s says the transaction could cost the company its investment-grade credit rating.
Dell, which will also receive a $2 billion loan from Microsoft as part of the deal, currently carries an A- rating at S&P, which announced it is putting the company on “CreditWatch Negative” Tuesday. The status reflects the firm’s perspective that the leveraged buyout “will materially degrade Dell’s financial risk profile.”
At present, S&P’s ratings reflect a “satisfactory” business risk profile at Dell, with an improving mix of higher-margin products offsetting significant weakness in its core PC business.
The likely outcome is a cut to Dell’s corporate credit rating to no higher than BB and perhaps to a single B level, according to S&P analyst Martha Toll-Reed.
Shares of Dell gained 1.1% to $13.42 Tuesday, closing below the $13.65 bid price from Dell and his partners. The stock is up more than 32% year-to-date and among the best performers in the S&P 500. (Click here for all the details on the Dell buyout offer.)
Follow @SchaeferStreet on Twitter, or on Forbes at the top of this post. Subscribe to updates on Facebook.
source
please give me comments thanks
0 comments:
Post a Comment