| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers S > Headlines for Seagate Technology International Inc. > News item |
Fitch rates Maxtor converts BBB-, notes BB
Fitch Ratings said it assigned a BBB- issuer default rating to Maxtor Corp., BBB- ratings to its $326 million 2.375% convertible senior notes due 2012 and $135 million 6.8% convertible senior notes due 2010 and a BB rating to its $49 million 5.75% subordinated debentures due 2012.
The agency also assigned BBB- issuer default and unsecured credit facility ratings to Seagate Technology HDD Holdings, which acquired Maxtor on May 19, and a BBB- rating to its upcoming issue of $1.25 billion senior unsecured notes. The debt of both companies is guaranteed by parent company Seagate Technology International Inc. The outlook is stable.
The agency said the ratings are supported by the combined entity's solid pro forma credit metrics and liquidity subsequent to the $1.25 billion debt issuance and a new bank revolver, strong revenue growth prospects driven by increasing consumer usage of digital-rich media, a leading market share in the hard disk drive industry, consistent operating profits and a broad product portfolio with industry-leading technology.
Fitch's rating concerns include consistent pricing pressure, uncertainty regarding Seagate's ability to successfully transition customers acquired through the purchase of Maxtor to Seagate products without incurring Maxtor revenue losses in excess of 50%, the potential long-term threat of technology substitution for certain product areas if NAND flash memory capacity expands significantly, Seagate's high fixed-cost structure and the potential for more aggressive shareholder-friendly initiatives.
The agency predicted that the company's total debt to EBITDA will remain slightly greater than 1x.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.