Computer Associates has put on hold plans to refinance approximately $2.5 billion in debt, following a Moody's Investors Service review that put the software and information technology provider on watch for downgrade. The Moody's decision surprised and disappointed CA, which was hoping to take advantage of low interest rates to complete the financing, said a CA official. CA is echoing concerns of other corporations the ratings agency is being overzealous following the Enron debacle.
An official at Computer Associates confirmed the $1 billion note offering has been cancelled, but declined comment on the $1.5 billion bank debt. The proposed Bank of America line was split between a $750 million, 364-day tranche and a $750 million three-year revolver. A number of banks had already signed onto the credit, including ABN AMRO, Mizuho Financial, Wachovia Bank, Bank of Tokyo-Mitsubishi and Royal Bank of Canada. The Moody's analyst covering CA did not return calls by press time.