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S&P rates Affiliated Computer loans BB+, retains negative watch
Standard & Poor's said it assigned a BB+ rating with a recovery rating of 3 to Affiliated Computer Services Inc.'s $1.8 billion of senior secured debt, which consist of a $1 billion six-year revolving credit facility and an $800 million term loan, and placed the rating on CreditWatch with negative implications.
The BB+ corporate credit and senior secured note ratings remain on CreditWatch, where they were placed with negative implications on Jan. 27. The $500 million of senior notes were also assigned a recovery rating of 3.
Proceeds from the term loan will be used to finance the shares tendered in a Dutch auction and to refinance existing debt. Following the expiration of the Dutch auction on March 17, less than 15% of the shares outstanding were tendered for a total cost of about $465 million instead of the contemplated 45% of shares.
The agency previously stated that it would likely lower the corporate credit rating to BB- if the $3.5 billion share repurchase were materially completed. The continued review reflects the smaller-than-expected tender and considers the possibility that the company may use its uncommitted facilities to pursue substantial additional share repurchases.
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