TEXT - Fitch cuts Dell long-term issuer default rating to 'BB+'

Tue Feb 5, 2013 5:01pm EST

Feb 5 - Fitch Ratings has downgraded Dell Inc.'s (Dell) ratings as
follows: 

--Long-term Issuer Default Rating (IDR) to 'BB+' from 'A';
--Bank credit facilities to 'BB+' from 'A';
--Senior unsecured debt at 'BB+' from 'A'; 
--Short-term IDR to 'B' from 'F1';
--Commercial paper (CP) to 'B' from 'F1'. 

Fitch has placed the ratings on Rating Watch Negative pending the conclusion of 
Dell's proposed leveraged buyout (LBO).

Approximately $12 billion of debt is affected by Fitch's action, including 
Dell's undrawn revolving credit facilities with aggregate capacity of $3 
billion. 

SENSITIVITY/RATING DRIVERS

The downgrades and placement on Rating Watch Negative reflect Dell's 
announcement that it will be acquired by Michael Dell and Silver Lake in a LBO 
transaction, which values the equity at $13.65 per share or $24.4 billion. The 
transaction remains subject to a 45-day go shop period and shareholder approval.
The transaction is expected to close by the end of July 2013.

Key details of the financing package for the proposed LBO have yet to be 
disclosed, but Fitch continues to expect pro forma leverage in the 3.5x - 4.5x 
range, as previously indicated in our press release dated Jan. 17, 2013. This 
would likely result in a long-term IDR in the mid to high single 'B' range. 

A 'BB-' rating is a possibility based solely on leverage at the very low end of 
the range. However, various other factors need to be considered, including the 
highly competitive environment in which Dell operates, the uncertain macro 
economy, public sector weakness, reduced financial flexibility to pursue future 
acquisitions, a nascent track record of its recently acquired enterprise 
portfolio, and the potential to burn cash in down cycles due to its negative 
working capital position.
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