S&P puts Symantec on watch

S&P said it placed the BBB- corporate credit rating on Symantec Corp. on CreditWatch with negative implications, along with the ratings on the company’s debt.

The CreditWatch placement follows news that Symantec plans to issue $4 billion of incremental debt to finance the acquisition of Web security provider Blue Coat Holdings Inc., S&P said.

While the contribution of Blue Coat provides additional scale and product line diversity, the agency said it estimates that the incremental debt will raise leverage to more than the previously published downside trigger of 2x at close, the agency said.

Leverage also may remain elevated for a sustained period thereafter, S&P added.

The agency said it will monitor developments related to the proposed transaction, including full details of the new debt, repayment plans, financial policy and required approvals, and plan to resolve the CreditWatch no later than the close of the acquisition.

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