S&P Global Ratings has placed all of Thomson Reuters Corp.'s ratings, including the BBB+ corporate credit ratings, on CreditWatch with negative implications after the financial technology company agreed to sell a 55% stake in its financial and risk business to a group of investors led by Blackstone Group LP.
The rating agency said the business accounts for over half of the company's consolidated revenue and EBITDA. Thomson Reuters will use most of the net proceeds to fund stock repurchases totaling $9 billion to $11 billion, repay $3 billion debt and invest $1 billion to $3 billion in its remaining tax and accounting and legal businesses.
The rating agency said the sale may weaken the company's overall business profile by reducing its scale, product and geographic diversity.
"At this stage, it isn't clear whether the debt repayment and the more focused, smaller and stable remaining business will fully offset the sale," S&P credit analyst Minesh Patel said.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
