Reuters: S&P Cuts Sun Micro to Junk, Shares Dip

“Standard & Poor’s on Friday cut Sun Microsystems Inc.’s
debt ratings to junk, citing losses at the company and fierce
competition in the server market, knocking its shares down more
than 5 percent.

“The company has a decent position in the server market, but
that market is relatively competitive, S&P said.

“Getting cut to junk often dramatically increases a company’s
borrowing costs, but Sun has no immediate borrowing needs. The cut
to junk will likely not affect the company’s operations. The main
impact will be on investors’ perception of the company, an analyst
said…”

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