Symantec (SYMC) Ratings Placed on CreditWatch Negative by S&P
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S&P Global Ratings today said it placed its 'BBB-' corporate credit rating on Symantec Corp., and the issue ratings on Symantec's debt, on CreditWatch with negative implications.
"The CreditWatch placement follows Symantec's announcement that it plans to acquire identity protection services provider LifeLock for $2.3 billion, funded with $1.5 billion of balance sheet cash and $750 million of incremental debt," said S&P Global Ratings credit analyst James Thomas.
While the contribution of LifeLock provides incremental product diversity and will support Symantec's consumer security business's revenue performance, we expect that the impact of incremental debt and lower cash levels will raise Symantec's adjusted leverage to over 4x at transaction close and that leverage will likely remain over 3x for 12-24 months afterward.
We will monitor developments related to the proposed transaction, including the proposed new debt's terms, repayment plans, financial policy, and required approvals, and plan to resolve the CreditWatch no later than the close of the acquisition. We expect a downgrade of the firm by more than two notches to be unlikely.
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