S&P: Keysight on watch

S&P said it placed the BBB- corporate credit rating on Keysight Technologies Inc. and the issue ratings on Keysight's debt on CreditWatch with negative implications.

The CreditWatch placement follows news that Keysight plans to acquire network test provider Ixia for $1.6 billion, which will be funded with cash on hand, debt and potentially equity, S&P said.

The transaction is expected to close before October 2017 and is subject to regulatory approvals, the agency said.

While the contribution from Ixia provides incremental product diversity, higher software exposure and higher growth opportunity, S&P said it believes the impact of incremental debt and lower cash levels could raise Keysight's pro forma adjusted leverage to near the 3x range when the transaction closes, depending on the mix of the equity component.

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