Moody's: Attachmate negative

Moody's Investors Service said it revised Attachmate Group Inc.'s ratings outlook to negative from stable and affirmed the company's B2 ratings as a result of the company's proposed debt-financed dividend. Moody's also affirmed the increased first-lien term loan B1 rating.

Moody's said the change in outlook to negative is driven by the increase in debt and decrease in liquidity as a result of the dividend while the company is still integrating the Novell acquisition.

While the company has taken considerable costs out of the combined companies, it is still too early to determine the impact of the restructuring on the business, the agency said. The company experienced several quarters of declining revenues post closing though there are early indications that the declines are reversing or at least slowing in the December quarter.

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