Fitch Ratings placed Gen Digital Inc.'s 'BB+' Long-Term Issuer Default Rating (IDR) on Rating Watch Negative (RWN). This action follows Gen Digital's announced acquisition of MoneyLion Inc., with Fitch citing uncertainty regarding the company's capital structure post-transaction.
Fitch anticipates that Gen Digital's EBITDA leverage may increase after the acquisition, potentially remaining at or above Fitch's 3.5x negative sensitivity threshold for fiscal years 2025 and 2026. The RWN reflects concerns that this leverage could persist longer than previously expected.
The rating agency expects to resolve the RWN upon the completion of the acquisition, which is projected for the first half of fiscal year 2026. Fitch may affirm Gen Digital's ratings if clarity emerges regarding the company's capital allocation plan, including commitments to reduce leverage.
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