Moody’s reviews Microsoft credit rating for cut after LinkedIn deal

A 3D printed logo of Microsoft is seen in front of a displayed LinkedIn logo in this illustration taken June 13, 2016. REUTERS/Dado Ruvic/Illustration

Rating agency Moody’s placed Microsoft Corp’s  ‘AAA’ credit rating under review for downgrade following the software giant’s deal to buy LinkedIn Corp for $26.2 billion, citing concerns that it would be funded through new debt.

Funding the deal entirely with debt will increase Microsoft‘s gross debt to EBITDA (earnings before interest, taxes, depreciation and amortisation) ratio, that could pressure its credit rating,Moody’s said in a statement on Monday.

Microsoft, which will buy LinkedIn in its biggest-ever deal, said it would issue new debt to fund the acquisition.

Separately, Standard & Poor’s affirmed its ‘AAA’ credit rating and stable outlook on Microsoft.

“Our rating affirmation on Microsoft reflects our view that the company’s acquisition of LinkedInadds to its diversified product portfolio,” S&P Global Ratings credit analyst David Tsui said.

The potential Moody’s ratings cut on Microsoft will leave Johnson & Johnson and Exxon Mobil Corp as the only U.S. companies retaining triple-A ratings from Moody’s. Exxon recently lost its triple-A from Standard & Poor’s.

Also read:

Microsoft agrees to buy LinkedIn for $26.2b

Microsoft Accelerator partners Singapore state fund Temasek to aid startups

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.