Sun Microsystems Inc has had a slap in the face from Moody’s Investors Service Inc, which placed the Single-B-1 rating of the high-flyer’s $100m of 5.25% convertible subordinated debentures under review for possible downgrade, and will also put a rating on the firm’s newly proposed $125m convertible subordinated debentures. Moody’s said its review was prompted by significant changes that have occurred at Sun and in the workstation market that have affected the operating and financial characteristics of the company. The review will focus on Sun’s operating outlook, inclusive of its market position and ability to restore and maintain margins. Moody’s also will evaluate Sun’s asset management capability in light of the significant increase in debt financed working capital it said.
