Fitch: Ratings Guidance Unaffected by Dell's Merger Agreement Modifications

  Fitch: Ratings Guidance Unaffected by Dell's Merger Agreement Modifications

Business Wire

NEW YORK -- August 2, 2013

The increased price of $13.75 per share plus the guarantee of 21 cents in
special and common dividends for Dell Inc. from Michael Dell and Silver Lake
would be accommodated at the current ratings guidance range of 'B+' to 'BB-',
according to Fitch Ratings. The increased purchase price and proposed
dividends would have minimal impact on leverage.

Fitch still believes the higher likelihood is for a 'B+' rating; however, the
increase in price does not eliminate the possibility for a 'BB-' rating once
the deal is consummated. Among other factors, final ratings will depend on
Fitch's comfort with Dell's long-term enterprise strategy given its existing
portfolio of products and services since resources for M&A could be limited,
as well as risks related to cash burn from the company's struggling PC
business and negative working capital balances.

Today's new offer is still subject to approval by shareholders on Sept. 12,
2013. There is currently no indication that Carl Icahn and affiliates will
vote for this revised proposal. However, Fitch believes the new shareholder
record date of Aug. 13, 2013 and modification of the voting standard to
reflect the majority of disinterested shares actually voting greatly increases
the probability of obtaining shareholder approval for the leveraged buyout.

Please see Fitch's comment dated July 24, 2013 (at www.fitchratings.com) for
commentary related to other potential rating outcomes should this deal not be
approved by shareholders.

Fitch originally placed Dell's 'BB+' rating on Negative Watch on Feb. 5, 2013.
It was the committee's intention to maintain all ratings on Watch Negative
should the transaction take more than six months to complete so long as no
material changes to the credit occur in the interim. Given the adjournment of
today's shareholder's vote, the Negative Watch will remain beyond six months.

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER
PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS
OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER
ON THE FITCH WEBSITE.

Contact:

Fitch Ratings
John M. Witt, CFA
Senior Director
Corporate Finance
+1-212-908-0673
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
James Rizzo
Managing Director
Corporate Finance
+1-212-908-0548
or
Media Relations
Brian Bertsch
+1-212-908-0549
brian.bertsch@fitchratings.com