Moody's rates Salesforce.com notes A2

Moody's Investors Service said it assigned an A2 rating to Salesforce.com, Inc.'s planned senior unsecured notes comprising mandatorily redeemable notes and sustainability notes.

“The A2 rating is supported by Moody's expectations for a strong financial profile and growing profitability driven by organic revenue growth in the high teens percentages over the next 12 to 24 months. Salesforce will have strong cash balances relative to its outstanding debt at the close of the acquisition and Moody's expects free cash flow to lease-adjusted total debt of about 30% to 35% over the next 12 to 24 months,” the agency said in a press release.

Salesforce intends to use the proceeds from the mandatorily redeemable notes to partially fund the pending acquisition of Slack Technologies, Inc. According to the proposed terms of the mandatorily redeemable notes, Salesforce will be required to redeem the notes if the acquisition of Slack does not occur by June 1, 2022. The proceeds from sustainability notes will be used to finance or refinance eligible green or social projects.

The outlook is stable.

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