Moody’s raises Dell CFR, loans, notes

Moody's Investors Service said it upgraded Dell Inc.'s corporate family and probability of default ratings to Ba2 and Ba2-PD from Ba3 and Ba3-PD, respectively.

In addition, the agency upgraded Dell International LLC's senior secured term loans and first-lien notes to Ba1 from Ba2 and Dell Inc.'s unsecured notes to Ba3 from B1.

The outlook is stable.

Moody’s said the upgrades reflect its expectation Dell will remain committed to sizable debt reduction with gross reported debt falling to below $13.5 billion by the end of fiscal year ending January 2016 (fiscal year 2016) from nearly $18 billion as of the closing date of the LBO in late October 2013.

The agency expects adjusted gross leverage to improve to the mid-3 times level by the end of fiscal year 2016 (or about mid-2 times including the adjustment for the finance operations), supported by more than $2 billion of free cash flow and mid single digit EBITDA growth over the next year.

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