- The Washington Times - Monday, April 13, 2009

NEW YORK (AP) - Moody’s Investors Service on Monday affirmed its corporate family credit rating on hard drive maker Seagate Technology two notches below investment grade, citing the company’s move to raise $430 million with new bonds.

Moody’s kept the corporate family rating at “Ba2” but downgraded ratings on senior unsecured notes and convertible senior notes to “Ba3” from “Ba2.”

Seagate’s speculative grade liquidity rating was upgraded to “SGL-2” from “SGL-3.”

The ratings moves, concluding a review that began in January, came after Seagate announced Monday it would sell $430 million worth of senior secured second-priority notes due 2014. The company said the new funds would help pay off up to $300 million in senior debt due in October and cover other debt.

Moody’s analyst Stephen Sohn said the ratings decisions are “supported by the company’s strengthened liquidity … and our expectation that the $430 million new notes offering will close.” The agency gave the new notes a “Ba1” rating, one notch below investment-grade.

Seagate also said Monday it expects sales for the quarter ended in March to surpass both its earlier forecast and Wall Street’s expectations because of solid demand for some of its products. But the company also decided to stop paying its quarterly dividend, in a move to preserve about $60 million a year in cash.

The company plans to post its third-quarter results on April 21. Its shares fell 31 cents, or 4.7 percent, to close at $6.34 Monday.

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