Fitch upgrades Dell

Fitch Ratings said it removed the ratings on Dell Inc. and wholly owned subsidiary Dell International LLC from Rating Watch positive and took various rating actions, including an upgrade of Dell's long-term issuer default rating to BB+ from BB following the completion of the company's acquisition of EMC Corp.

The outlook is stable.

Fitch said it expects Dell to use $4 billion to $5 billion of annual free cash flow and more than $5 billion of net proceeds from the recently announced divestitures for debt reduction.

As a result, the agency said it expects $13 billion to $15 billion of debt reduction and growing profitability over the next 18- to 24-months will drive core leverage toward 3x from an estimated 6x at the acquisition’s close.

EMC increases Dell's scale and diversification, including share leadership in fast-growing emerging storage markets and strong positions in high-value and mid-range legacy products, Fitch explained.

The company still has significant exposure to the personal computer (PC) market, the agency added.

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