Dell Debt Cut to Junk by S&P Ahead of LBO Vote
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Dell Inc., the computer maker putting a $24.9 billion buyout proposal to a shareholder vote tomorrow, had its corporate credit rating cut to junk by Standard & Poor’s.
The transaction planned by Chief Executive Officer Michael Dell and Silver Lake Management LLC would create a more leveraged capital structure and diminished free operating cash flow, hampering the company’s ability to invest in new businesses and technologies, S&P said in a statement today. S&P lowered Round Rock, Texas-based Dell’s corporate credit rating four levels to BB- from BBB with a stable outlook.