S&P rates DXC notes BBB-

S&P said it assigned a BBB- rating to DXC Technology Co.’s planned euro-denominated unsecured notes. Subsidiary DXC Capital Funding DAC will sell the notes. The agency assigned a BBB- issuer rating to the issuer. DXC Technology and subsidiary DXC Luxembourg International Sarl will guarantee the notes.

“Our rating on DXC Technology reflects its high exposure to mature traditional infrastructure outsourcing services that make its business turnaround difficult over the next couple of years. The company's revenue erosion the past several years led to significant business restructuring that weakened free operating cash flow (FOCF) generation relative to similarly rated peers. Additionally, we expect increased risk of acquisitions to help stem revenues and add revenues,” S&P said in a press release.

The proceeds will be used to refinance debt.

The outlook is stable.

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