Moody's ups Seagate, rates notes Ba1

Moody's Investors Service said it upgraded Seagate Technology HDD Holdings' corporate family rating and probability of default rating to Ba1 from Ba2; $412.8 million guaranteed senior secured second-priority notes due May 2014 to Baa3 (LGD2, 20%) from Ba1 (LGD2, 23%); $77.5 million convertible senior notes due April 2010, $559 million guaranteed senior unsecured notes due October 2011 and $598.8 million guaranteed senior unsecured notes due October 2016 to Ba1 (LGD4, 62%) from (LGD4, 64%); $30.9 million convertible subordinated debentures due March 2012 to Ba2 (LGD6, 96%) from B1 (LGD6, 96%) and its speculative grade liquidity rating to SGL-1 from SGL-2.

The outlook is stable.

The agency also said it assigned a Ba1 rating to the proposed offering of $500 million 10-year senior unsecured notes issued by Seagate's wholly owned subsidiary, Seagate HDD Cayman. The proceeds will be used to reduce existing debt.

The upgrades reflect expectations that Seagate will continue to experience solid operating performance, strong free cash flow generation and enhanced liquidity, Moody's said.

The ratings also consider Seagate's leading position with the broadest product offering in the disk drive industry, the agency said.

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