West Digital 7.375%
West Digital 10.5%
Next Call Dates
before 4/1/2019 (110)
Bond Ratings (Moody's/S&P/Fitch)
Quick Ratio (MRQ)
Current Ratio (MRQ)
LT Debt to Equity (MRQ)
Total Debt to Equity (MRQ)
- U.S.-based Western Digital Corp., a manufacturer of hard disk drives (HDDs) and other data storage products, is issuing approximately $14 billion of debt to fund its previously announced acquisition of SanDisk Corp.
- We are assigning our 'BB+' corporate credit rating to Western Digital.
- We are also assigning our 'BBB-' issue-level rating and '2' recovery rating to the company's proposed senior secured notes and senior secured credit facilities, and our 'BB+' issue-level rating and '4' recovery rating to its proposed senior unsecured notes.
- The stable rating outlook reflects our expectation that SanDisk's NAND technologies will enable Western Digital to successfully navigate the threat of solid state drive (SSD) substitution to the HDD industry.
NEW YORK (Standard & Poor's) March 11, 2016--Standard & Poor's Ratings Services today said it assigned its 'BB+' corporate credit rating to Irvine, Calif.-based Western Digital Corp. The rating outlook is stable. At the same time, we assigned our 'BBB-' issue-level rating and '2' recovery rating to the company's proposed $1 billion seven-year senior secured notes and $10 billion senior secured credit facility, which consists of a $1 billion five-year revolving credit facility, a $3 billion five-year term loan A, and a $6 billion seven-year term loan B. The '2' recovery rating indicates our expectation for substantial recovery (70%-90%; lower half of the range) of principal in the event of a payment default. We also assigned our 'BB+' issue-level rating and '4' recovery rating to the company's proposed $4.1 billion eight-year senior unsecured notes. The '4' recovery rating indicates our expectation for average recovery (30%-50%; lower half of the range) of principal in the event of a payment default. "The rating on Western Digital reflects our view that the array of SanDisk's NAND technologies and manufacturing capacity, through the Toshiba joint venture, will enable Western Digital to better navigate the transition in storage toward SSDs for data-driven performance sensitive applications serving the needs of both consumer and enterprise customers," said Standard & Poor's credit analyst Jenny Chang. Continued weakness in the personal computer (PC) end market, declining demand for HDD products, and considerable customer concentration represent ongoing credit risks and are the basis for our business risk profile assessment for the combined entity. The rating also reflects our expectation that Western Digital will maintain leverage below 3x, including our surplus cash netting and other adjustments, despite our expectation that revenues, on a pro forma basis, will decline over the next 12 to 18 months. The stable rating outlook reflects our expectation that SanDisk's NAND technologies will enable Western Digital to successfully navigate the threat of SSD substitution to its HDD business, and that the combined entity will generate healthy free cash flow and sustain adjusted leverage below 3x over the next 12 to 18 months.