Shares Of CA Drop On Debt Review


Shares of Computer Associates International tumbled more than 14 percent Wednesday morning after Moody's Investors Service said it may cut the company's debt rating.

As a result of Moody's review, the enterprise software vendor is delaying until Feb. 8 the sale of $1 billion in senior notes, a refinancing that was intended to restructure its debt at a lower interest rate, Islandia, N.Y.-based CA said in a statement.

"The company believes its strong cash flow, ongoing debt reduction and competitive successes support its current debt ratings," CA said.

In a statement, Moody's said, "CA's cash flow generation will remain weakened from historic levels for at least the near term and that competitive rivalry across the company's rapidly evolving software markets remains formidable amidst a weak corporate buying environment for enterprise software."

CA affirmed its guidance of $770 million in revenue and an operations loss of 4 cents to 5 cents per share for its fourth fiscal quarter ending March 31.

Shares of CA traded down $4.42 to $26.95 Wednesday morning.