Seagate Technology Inc has won an upgrade from Standard & Poor’s Corp, which raised the disk-maker’s subordinated debt to double-B-plus from single-B-plus and removed it from CreditWatch. Total debt is about $600m and the implied senior rating is triple-B-minus. The rating upgrade reflects the company’s above-average performance in a volatile marketplace, technical competence, and healthy balance sheet, the agency noted, saying that Seagate is diversified and well-positioned across the disk drive product spectrum and remains the lowest cost provider as a result of its vertical integration and component engineering capability. It could also drive its components operation harder by selling its thin film heads, head stack assemblies, motors, and media to other manufacturers. Nevertheless it remains exposed to intense competition, short product life cycles, and sharp demand swings. These factors are mitigated by the company’s broad product line, solid customer base, and vertical integration, the agency declared.
