Apple Computer Inc has disconcerted Standard & Poor’s Corp, which has put the company’s triple-B’ senior debt and A-2′ commercial paper ratings on CreditWatch with negative implications, following the company’s announcement that it may report a loss for the quarter ended December 31. About $760m of total debt is affected. Although Apple has successfully managed its product line transition to the PowerPC microprocessor, significant challenges remain, the ratings agency said darkly.
Apple Computer Inc saw the other shoe drop when Moody’s Investors Service Inc placed its Prime-2 rating for short-term debt and its Baa2 senior unsecured debt rating under review for possible downgrade. In its review, Moody’s will assess the near- and intermediate-term outlook for Apple’s revenues and profitability, liquidity, and debtholder protection measurements. It will also examine the cash flow impact of any possible actions management may take in order to improve the cost structure, and seek to assess Apple’s longer-term competitive position in the increasingly Windows-dominated IBM-compatible personal computer world.
