S&P Assigns Twitter Credit With Junk Rating

S&P assigned a junk rating of BB- to Twitter's credit on Thursday, saying the microblogging site's business risk profile was just "fair." The ratings company said it has a stable outlook in Twitter's credit, to reflect the company's high growth potential over the next several years, including expectations of healthy monthly active user (MAU) and revenue growth. However, S&P does not expect Twitter to pursue shareholder activities such as buybacks and dividends. S&P also issued a BB- rating and a "3" recovery rating on the company's $1.8 billion in convertible debt issued in September, which indicates expectations for a meaningful recovery of as much of 70% of principal in the event of default. Its shares fell 5.2% to $40.33 in recent trade.

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