Dell Inc., which has $6 billion of debt due before 2016, is being treated like a junk-rated borrower as its cash falls to the lowest level in a decade with customers favoring tablets and smartphones over personal computers.

Credit-default swaps tied to the fourth-largest PC maker are trading at levels that imply Dell should be rated Ba1, or six levels below its current grade, according to Moody's Corp.'s capital markets research group. Moody's Investors Service has Dell at A2, while Standard & Poor's puts it one level lower at A-.

The contracts, which climb as confidence in a borrower's creditworthiness dims, surged after Round Rock, Texas-based Dell forecast last week third-quarter revenue below analysts' estimates and cut its full-year profit outlook. Attempts to transform by adding software, storage and networking equipment have been slow to offset falling sales of desktops and laptops, which make up about half of revenue. Customers increasingly prefer tablets such as Apple Inc.'s iPad to traditional machines.

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