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Moody's downgrades Oracle bond outlook

Moody's Investors Service has downgraded its outlook on Oracle bonds to "negative," citing the company's for rival software maker PeopleSoft.

Moody's said the bid, a cash offer worth about $5.1 billion, would require "substantial use of cash and additional bridge financing." The investment service also thinks that the hostile takeover "is likely to lead to a protracted takeover battle and that Oracle will likely have to increase the per-share offer price in order to complete the tender offer." Additionally, Moody's predicts that Oracle will suffer a reduction in its "financial flexibility" as a result.