S&P downgrades Seagate

S&P said it lowered its corporate credit rating on Seagate Technology plc to BB+ and revised the outlook to stable from negative.

S&P also lowered all issue level ratings on the company's unsecured notes to BB+ in conjunction with the downgrade. The recovery rating is 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default.

“The downgrade is based on our view of Seagate's diminishing business prospects, given its concentration in the HDD market, which is sensitive to flash memory prices and the affordability of SSDs. The fiscal fourth quarter underperformance highlights the company's lack of business diversity to address customers' evolving storage needs, and more specifically its reliance on enterprise performance that has been increasingly pressured by the price and availability of substitute products,” S&P said in a news release.

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