Moody's Places Harman (HAR) Ratings on Review for Upgrade

November 15, 2016 1:10 PM EST

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Moody's Investors Service ("Moody's") placed Harman International Industries, Inc's. (NYSE: HAR) Baa3 senior unsecured rating under review for upgrade. This follows yesterday's announcement that Samsung Electronics Company, Ltd. ("Samsung") plans to acquire Harman for $112 per share in cash or about $8.0 billion for the equity, excluding transaction expenses. The acquisition, which is subject to Harman shareholder approval, antitrust reviews by US and foreign regulatory authorities, and review by the Committee on Foreign Investment in the United States ("CIFIUS"), is expected to close in the middle of 2017.

RATINGS RATIONALE

The outcome of the rating review will depend on the nature of Samsung's support of Harman's existing debt. Should Samsung agree to guarantee all of the Harman debt, Moody's would anticipate raising the senior unsecured ratings of Harman to that of the Samsung senior unsecured debt following closing of the acquisition. If all of Harman's rated debt is repaid at closing, Moody's would withdraw all of Harman's ratings.

The following rating actions were taken:

On Review for Upgrade:

..Issuer: Harman International Industries, Inc.

....Senior Unsecured Bank Credit Facility, Placed on Review for Upgrade, currently Baa3

....Senior Unsecured Regular Bond/Debenture, Placed on Review for Upgrade, currently Baa3

..Issuer: Harman Finance International S.C.A.

....Senior Unsecured Regular Bond/Debenture, Placed on Review for Upgrade, currently Baa3

Outlook Actions:

..Issuer: Harman International Industries, Inc.

....Outlook, Changed To Rating Under Review From Stable

..Issuer: Harman Finance International S.C.A.

....Outlook, Changed To Rating Under Review From Stable



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