Western Digital Debt Rating Is Downgraded

IRVINE — Standard & Poor’s Corp. downgraded the debt rating of computer components maker Western Digital Corp. because of the company’s continuing financial problems.

S&P;, a debt-rating service, lowered Western Digital’s rating on $59 million in subordinated debt from B to CCC, which means it tagged the debt a high risk for repayment.

S&P;, which placed the debt on its credit watch list in February, said it lowered the rating to reflect the company’s substantial losses totaling $172 million in the past five quarters.

Although Western Digital improved its financial position last month by completing a restructuring of $206 million in bank debt, S&P; noted that the company’s overall financial flexibility remains limited.

For instance, S&P; said the company must make a $25-million payment before mid-1993 and will be hard-pressed to improve its cash flow given a weak economy and fierce electronics industry price competition. An additional downgrade is possible if the company is unable to recover, S&P; said.