S&P revises Dell, VMware views to negative

S&P said it affirmed its BB+ issuer credit rating on Dell Technologies Inc.

The agency revised the outlook to negative from stable.

At the same time, S&P affirmed all the issue-level ratings on Dell's debt.

In addition, the agency affirmed the BBB- issuer credit rating on VMware Inc. and revised the outlook to negative from stable.

S&P also affirmed the BBB- issue-level ratings on VMware's unsecured revolving credit facility and senior unsecured notes.

The agency said the actions follow Dell’s announcement to revise it optional cash election to up to $14 billion, from up to $9 billion previously, as part of the exchange of its publicly-traded class V tracking stock for its class C common stock.

Dell has secured bridge financing for the incremental $5 billion cash portion of the proposed transaction.

S&P said the negative outlook reflects a view that pro forma leverage will be high, in the mid-4x area as of quarter-ended Aug. 3, following Dell's proposed $5 billion incremental debt issuance.

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