Symantec (SYMC) Ratings Placed on CreditWatch Negative by S&P

Standard & Poor's Ratings Services today said it placed its 'BBB' corporate credit rating on Mountain View, Calif.-based Symantec Corp., (Nasdaq: SYMC) and the issue ratings on Symantec's debt, on CreditWatch with negative implications.

"The CreditWatch placement follows Symantec's announcement that it plans to separate into two public companies by the end of 2015 through a tax-free spin-off transaction," said Standard & Poor's credit analyst Philip Schrank.

Symantec will focus on the faster growing security business (currently about $4.2 billion in revenue with a 30% operating margin) and the new company will focus on the information management segment (currently about $2.5 billion in revenue with a 23% operating margin). While the separation will provide greater focus at each company, it will also diminish Symantec's current business diversity and cash flow.

We will monitor developments related to the proposed transaction, including required approvals. At this time it is undetermined if we will rate the new information management company. However, we expect to continue to provide ratings to the Symantec security firm and will meet with its management team to review and assess its business strategies, the separation and restructuring charges associated with this transaction, capital structure, and ongoing financial policy. Although Symantec has stated its goal to retain investment-grade ratings on the security business, at this point we do not have sufficient details and will assess the business and financial risk profiles before making a rating determination.

You May Also Be Interested In

• KeyBanc Upgrades Sherwin-Williams (SHW) to Overweight
• MarineMax (HZO) PT Lowered to $35 at Stifel
• S&P Global (SPGI) Tops Q1 EPS by 36c; offers guidance