S&P Places eBay (EBAY) on Review for Downgrade

Standard & Poor's Ratings Services said it kept its ratings on San Jose, Calif.-based eBay Inc. (Nasdaq: EBAY), including the 'A' corporate credit rating, 'A-1' commercial paper rating, and 'A' senior unsecured debt rating, on CreditWatch with negative implications.

"The original CreditWatch placement followed the company's announcement that it plans to spin off its PayPal unit in 2015 through a tax-free transaction," said Standard & Poor's credit analyst Philip Schrank.

The terms of the deal have not been disclosed. The PayPal unit has grown faster than eBay's marketplace auction business and its separation will lessen eBay's business diversity and growth prospects.

We will continue to monitor developments related to the proposed transaction, including required regulatory approvals. We will meet with eBay's new management team to review and assess its business strategy following the spin-off, the terms of the separation and eBay's subsequent capital structure, and eBay's ongoing financial policy.

In its 2014 third quarter, revenues increased 12%, and the company's cash and non-equity investments portfolio totaled $15.1 billion at Sept. 30, 2014.

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