Keysight’s rating remains solid at ‘BBB+’; New senior unsecured debt also rated at ‘BBB+’.

Fitch Ratings projects that the EBITDA leverage will remain low at 1.6x by the conclusion of fiscal 2025 despite a new senior unsecured debt issuance. This forecast suggests that the company will exercise caution in maintaining financial leverage during mergers and acquisitions.

Maintaining a low leverage level during M&As is essential for companies to ensure financial stability and manage potential risks effectively. Excessive debt can hinder a company’s ability to invest in growth opportunities, withstand economic downturns, and meet debt obligations. By keeping leverage at a manageable level, companies can improve their credit ratings and access to favorable financing options.

Fitch’s projection of a 1.6x EBITDA leverage by the end of fiscal 2025 indicates that the company is taking a prudent approach to financial management. This conservative strategy will likely be viewed positively by investors, as it demonstrates a commitment to financial discipline and long-term sustainability.

Companies that prioritize maintaining low leverage during M&As also reduce the likelihood of financial distress and bankruptcy. High levels of debt can increase a company’s vulnerability to economic shocks and limit its ability to navigate challenging market conditions. By keeping leverage in check, companies can enhance their financial resilience and position themselves for long-term success.

Furthermore, a low leverage ratio can lead to lower borrowing costs, as lenders typically view companies with less debt as less risky. This can result in savings on interest expenses and improve overall profitability. By demonstrating a commitment to financial prudence, companies can attract investors and lenders who value stability and responsible financial management.

Overall, Fitch’s forecast of a 1.6x EBITDA leverage by the end of fiscal 2025 underscores the importance of maintaining low leverage during mergers and acquisitions. This approach can help companies enhance their financial stability, improve access to financing, and minimize risk. By prioritizing financial discipline and sustainability, companies can position themselves for long-term growth and success in an increasingly competitive business environment.