Information technology (IT) security solutions provider
) recently commenced a public offering of senior unsecured notes
worth $1.0 billion, in two parts. J.P. Morgan Securities LLC, a
JPMorgan Chase & Co.
), Merrill Lynch and
Morgan Stanley & Co. LLC
) are acting as administrative agents for the purpose, along with
certain other lenders. The offer will cease on June 14.
The first part, which will be for $600.0 million will mature in
June 2017 and carry an interest rate of 2.75%. The issuance of the
second part will bring in the remaining $400.0 million. These 3.95%
interest bearing notes will mature in June 2022.
The notes have been assigned ratings of "Baa2" and "BBB" by
) and S&P 500, respectively. The rating indicates that the
obligator has enough capacity to meet its financial obligations
like short-term debt. The credit ratings act as financial
indicators for potential investors.
The raised amount will enable Symantec to increase fund
availability and finance its continuing working capital
requirements, offering-related expenses, capital expenditure, and
facilitate the repayment of its 1.0% convertible senior notes due
in June 2013.
On March 30, 2012, Symantec had a senior notes balance of $1.1
billion and a Convertible senior notes balance of $1.0 billion.
Following the recent debt issuance, the senior notes balance will
go up by an additional $1.0 billion.
While the repayment of convertible notes will lower the debt
balance once again, we note that the company is taking this debt at
higher interest rates, which will have an impact on its interest
Symantec exited the fourth quarter with $3.21 billion in cash,
cash equivalents and short-term investments, up from $2.38 billion
reported in the previous quarter. It bears a total debt (including
senior notes and convertible notes) of $2.04 billion, roughly
unchanged from the previous quarter. The balance sheet shows a good
cash position and justifies the debt ratings conferred by the
Overall, Symantec's performance was modest in the fourth quarter
with the bottom line matching the Zacks Consensus Estimate.
Symantec also provided a lackluster first quarter guidance given
the continuing uncertainty over PC sales, cautious tech spending by
different governments and the economic turmoil in Europe.
Symantec has a Zacks #5 Rank, implying a short-term Strong Sell
JPMORGAN CHASE (JPM): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
SYMANTEC CORP (SYMC): Free Stock Analysis
To read this article on Zacks.com click here.