S&P: Sun Microsystems unchanged

Standard & Poor's said that Sun Microsystems Inc. (BB+/stable/A-3) recently announced a $700 million private placement transaction of senior convertible notes with KKR Equity Investors, LP.

In conjunction with or shortly following the close of this bond transaction, a nominee of KKR will be presented for appointment to Sun's board of directors, the agency said, adding that it does not expect the proposed transaction to have a current impact on its ratings or outlook for the company.

While Sun's funded debt level will increase, so will the company's already substantial net cash position, the agency added.

However, the presence of a KKR nominee on Sun's board does raise concerns about potential future changes in Sun's financial policy and financial profile, particularly in light of increasing LBO activity in the technology sector, S&P said.

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