Fitch upgrades Seagate

Fitch Ratings said it upgraded Seagate Technology plc's issuer default rating to BBB- from BB+ and Seagate HDD Cayman's issuer default rating to BBB- from BB+ and senior unsecured debt to BBB- from BB+.

The outlook is stable.

The upgrades reflect expectations for relatively stable hard disk drive (HDD) pricing going forward due to a highly consolidated industry structure, the agency said.

Seagate's solid liquidity and financial flexibility are supported by $2 billion in cash, the vast majority of which is readily accessible without adverse tax considerations, Fitch said, along with generally positive annual free cash flow and an undrawn $350 million senior unsecured revolving credit facility due 2015.

The agency also said it believes Seagate's free cash flow volatility will continue to moderate due to a more stable HDD pricing environment, lower demand volatility and favorable product mix shift.

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