S&P revises Juniper outlook to negative

S&P said it revised its outlook for Juniper Networks Inc. to negative from stable and affirmed its BBB issuer rating.

The outlook revision follows Hewlett-Packard Enterprise Co. announcing it agreed to acquire Juniper, the agency said.

“As our issuer credit ratings on both companies are BBB combined with the acquisition announcement, our view on Juniper reflects our view on HPE. If the deal closes without Juniper or its subsidiaries issuing any more debt, we will likely rate it the same as HPE. If the deal closes with no contractual or structural subordination issues that affect Juniper's legacy debt that would survive the transaction, our issue-level ratings on that debt will follow Juniper's issuer credit rating,” S&P said in a statement.

The outlook reflects the agency’s view on HPE, it said.

S&P said it expects pro forma adjusted leverage that will top 2x at the close of the transaction, which could remain elevated over the following two years while HPE integrates Juniper. “The negative outlook also reflects uncertainty related to HPE's financing plan, including potential receipt of proceeds from its sale of the H3C business, issuance of hybrid capital, and any change to its shareholder return strategy.”

The deal is expected to close in late 2024 or early 2025.

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