S&P Downgrades Symantec (SYMC) to 'BBB-'; Outlook to Stable on Veritas Sale
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Standard & Poor's Ratings Services said it lowered its corporate credit and debt ratings on Symantec Corp. (Nasdaq: SYMC) to 'BBB-' from 'BBB', and removed all ratings from CreditWatch, where we had placed them with negative implications on Oct. 9, 2014. We also assigned our 'BBB-' issue-level rating to Symantec's newly issued $500 million convertible notes. The outlook is stable.
"The downgrade of Symantec reflects its diminished business diversity and scale, as well as our view that the firm faces challenges to grow the remaining security business' revenues and EBITDA in an evolving and increasingly competitive IT security marketplace," said Standard & Poor's credit analyst James Thomas.
The stable outlook on Symantec reflects our expectation that proceeds from the recently closed sale of Veritas and solid free cash flow will enable the firm to maintain Standard & Poor's-adjusted leverage below 2x in spite of significantly increased shareholder returns, and continued, if moderating, revenue declines through the next two fiscal years.
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