Moody's could lift Beats

Moody's Investors Services said it placed the ratings of Beats Electronics, LLC under review for upgrade, including the company's B2 corporate family rating, B2-PD probability of default rating and B1 senior secured instrument ratings (term loan and revolver).

This action follows the company's announcement that it entered into an agreement to be acquired by Apple Inc. (Aa1 stable) in a transaction valued at about $3 billion.

The proposed $3 billion acquisition is subject to regulatory approval.

Apple expects to fund the proposed acquisition with $2.6 billion in cash and another $400 million that will vest over time. Beats expects the transaction to close sometime next quarter.

"The transaction is clearly credit positive for Beats in our view," Moody's senior credit officer Kevin Cassidy said in a news release. In Moody's view, the combined Apple/Beats company will have the broadest streaming and download rights of any online music services, and adding Jimmy Iovine and Dr. Dre to senior management roles at Apple will deepen the company's relationships within the music industry.

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