S&P: Sun Microsystems on developing watch

Standard & Poor's said it placed the BB+ corporate credit rating on Sun Microsystems Inc. on CreditWatch with developing implications.

"The CreditWatch listing follows widely disseminated press reports that Sun has been in negotiations with IBM (A+/stable/A-1) and potentially others, to be acquired," S&P analyst Philip Schrank said in a statement.

The agency said that, reportedly, the talks with IBM have broken off for now. If Sun agrees to merge with a higher rated entity, its' ratings could be raised.

If Sun remains independent, ratings could be lowered if the company chooses to adopt shareholder-friendly initiatives, such as a large share repurchase or a one-time dividend funded by debt that would weaken credit protection measures or reduce liquidity, the agency said.

© 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.