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Industry Report Card: Global High Technology Ratings Trend Stays Negative Amid Consolidation And LBOs Oct 06
Standard & Poors, Oct 2006
Abstract
Despite a relatively stable operating environment, credit trends have shifted to clearly negative for the year to date, from fairly balanced, but slightly positive, during 2005. Technology companies are increasingly willing to take on debt, most dramatically evidenced by the pending $17 billion LBO of Freescale Semiconductor Inc. by a private equity consortium. Standard & Poor's Ratings Services' ratings on the company were lowered out of investment grade after the announcement, and likely will be lowered into the 'B' category upon completion of the deal. Somewhat less dramatically, our ratings on both Computer Sciences Corp. and Affiliated Computer Services Inc. were lowered because of large share repurchases; however, both ratings remain on CreditWatch with negative implications because of stock-options grant...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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