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+--- Thread: Dell downgrade due on massive takeover debt - S&P (/showthread.php?tid=148320)
Dell downgrade due on massive takeover debt - S&P - SteveG - 02-06-2013
If interest rates go up, will it be 'Gateway Time' for Dell? http://www.forbes.com/sites/steveschaefer/2013/02/05/sp-says-dell-downgrade-coming-after-debt-fueled-24b-buyout/
You break me up, Mike
"Founder Michael Dell and private equity firm Silver Lake Partners have agreed to buy Dell in a $24.4 billion deal that will load debt onto the PC-maker, and Standard & Poor’s says the transaction could cost the company its investment-grade credit rating.
The likely outcome is a cut to Dell’s corporate credit rating to no higher than BB and perhaps to a single B level, according to S&P analyst Martha Toll-Reed."
Re: Dell downgrade due on massive takeover debt - S&P - Speedy - 02-06-2013
Junk in, junk out.
Re: Dell downgrade due on massive takeover debt - S&P - sekker - 02-06-2013
Dell is getting a majority stake in the new company after putting in roughly $6B total assets.
This company is going to be HUGELY leveraged to the banks.
Re: Dell downgrade due on massive takeover debt - S&P - Z - 02-06-2013
And the private equity firms will laugh all the way to the bank.
Re: Dell downgrade due on massive takeover debt - S&P - tenders - 02-07-2013
If rates go up from here, Dell has nothing to worry about UNTIL the debt needs to be refinanced. They are not planning to be private that long. Silver Lake is going to want to ring their cash register in an IPO or sale.
Alternatively,,, rates will go up if and when the economy improves. Dell should benefit hugely from that so perhaps their business would have grown to the point at which they can afford to remain private at the new interest rate.
If Dell continues to flounder and rates go up, they're done for.