Western Digital Corp, Irvine, California is seen to be climbing out of the mire after its comprehensive disposals programme, which leave it primarily as a small disk drive designer and maker – and even here, it has signed IBM UK Ltd to make some of its drives for Europe. Standard & Poor’s Corp has responded accordingly but has not entirely removed the storm cones it hoist over the company’s debt: it has raised its rating on the company’s subordinated debt, but only to triple-C-plus from triple-C – and anything lower than B is a very junky rating indeed. The implied senior debt rating is single-B, and about $60m of debt is affected. The rating upgrade reflects improvement in the company’s financial condition and return to profitability, and the outlook is stable, Standard & Poor’s says, adding that new product introductions have helped the company’s near-term competitive position – but many of the company’s competitors have greater flexibility to withstand cyclical pressures, it advises.
