Moody’s cuts Seagate HDD

Moody’s Investors Service said it downgraded Seagate HDD Cayman’s senior unsecured ratings to Ba1 from Baa3. Moody’s concurrently assigned a Ba1 corporate family rating, a Ba1-PD probability of default rating, and an SGL-1 speculative grade liquidity rating.

Seagate’s plans to issue $1 billion of senior notes, the proceeds of which Moody’s expects will primarily be used to fund share repurchases, prompted the downgrade, the agency said.

“The downgrade reflects Seagate’s increasingly aggressive shareholder-friendly financial policy and our view that the company will operate at a higher financial leverage and its cash balances will likely decline relative to debt over the next 12 to 24 month,” said Raj Joshi, a Moody’s analyst, in a press release.

The outlook remains stable.

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