Deals
Oracle’s Cerner Purchase Prompts a Trio of Debt-Downgrade Warnings
- Software firm could issue more debt to finance the purchase
- Company was slashed to the BBB tier from A earlier this year
This article is for subscribers only.
Oracle Corp. could see its investment-grade ratings fall to the cusp of junk if it loads up on debt to fund its nearly $30 billion acquisition of medical-records company Cerner Corp.
Following the announcement of the $28.3 billion purchase of Cerner Monday, all three major U.S. ratings graders said they may downgrade Oracle if it increases leverage to carry out the transaction. S&P Global Ratings indicated the software company could be cut by as many as two notches to BBB-, adding that it’s likely to retain its investment-grade rating though some curtailment of share buybacks would probably be required.