Bulletin: Reported Oracle Corp. Deal For TikTok Could Have Negative Rating Implications - S&P Global Ratings’ Credit Research

Bulletin: Reported Oracle Corp. Deal For TikTok Could Have Negative Rating Implications

Bulletin: Reported Oracle Corp. Deal For TikTok Could Have Negative Rating Implications - S&P Global Ratings’ Credit Research
Bulletin: Reported Oracle Corp. Deal For TikTok Could Have Negative Rating Implications
Published Sep 14, 2020
2 pages (1073 words) — Published Sep 14, 2020
Price Free  |  Buy this Report Now

About This Report

  
Abstract:

SAN FRANCISCO (S&P Global Ratings) Sept. 14, 2020--The Wall Street Journal reported yesterday that Redwood City, Calif.-based enterprise software provider Oracle Corp. (A/Negative/--) has won the bidding for video-sharing app TikTok's U.S. operations, but that the deal is not likely to be structured as an outright sale. If the reporting is accurate, the transaction could result in downgrade for Oracle. In our report on the company published June 19, we said that we could downgrade Oracle if its leverage exceeds 2.5x. We estimate Oracle's S&P Global Ratings adjusted net leverage as of Aug. 31 at 1.8x; a change in net debt of $13 billion would cause the company to reach our threshold assuming no EBITDA contribution from TikTok. Bloomberg reported

  
Brief Excerpt:

...September 14, 2020 SAN FRANCISCO (S&P Global Ratings) Sept. 14, 2020--The Wall Street Journal reported yesterday that Redwood City, Calif.-based enterprise software provider Oracle Corp. (A/Negative/--) has won the bidding for video-sharing app TikTok's U.S. operations, but that the deal is not likely to be structured as an outright sale. If the reporting is accurate, the transaction could result in downgrade for Oracle. In our report on the company published June 19, we said that we could downgrade Oracle if its leverage exceeds 2.5x. We estimate Oracle's S&P Global Ratings adjusted net leverage as of Aug. 31 at 1.8x; a change in net debt of $13 billion would cause the company to reach our threshold assuming no EBITDA contribution from TikTok. Bloomberg reported that early offers had reached $25 billion, but that was before Chinese officials weighed in with new rules imposing limits on technology exports. A deal in which Oracle is a technology partner rather than a full owner could lower...

  
Report Type:

Bulletin

Ticker
ORCL
Issuer
Oracle Corp.
GICS
Systems Software (45103020)
Sector
Global Issuers , Public Finance
Country
United States
Region
United States
Format:
PDF Adobe Acrobat
Buy Now

More from S&P Global Ratings’ Credit Research

S&P Global Ratings’ Credit Research—S&P Global Ratings’ credit research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P Global Ratings also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.

About the Author


Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Bulletin: Reported Oracle Corp. Deal For TikTok Could Have Negative Rating Implications" Sep 14, 2020. Alacra Store. Nov 07, 2026. <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Reported-Oracle-Corp-Deal-For-TikTok-Could-Have-Negative-Rating-Implications-2512666>
  
APA:
S&P Global Ratings’ Credit Research. (). Bulletin: Reported Oracle Corp. Deal For TikTok Could Have Negative Rating Implications Sep 14, 2020. New York, NY: Alacra Store. Retrieved Nov 07, 2026 from <http://www.alacrastore.com/s-and-p-credit-research/Bulletin-Reported-Oracle-Corp-Deal-For-TikTok-Could-Have-Negative-Rating-Implications-2512666>
  
Free
$  £  €
Have a Question?

Any questions about the report you're considering? Our Customer Service Team can help! Or visit our FAQs.

More Research

Search all our Credit Research from one place.