Moody's ups Amazon notes to Baa3

Moody's Investors Service said it upgraded Amazon.com's senior subordinated notes to Baa3 from Ba2.

The outlook is stable.

According to the agency, the upgrade is prompted by Amazon's ability to generate strong growth and maintain healthy profitability during a very challenging retail climate.

The upgrade also reflects expectation that the company will continue to perform solidly and maintain strong debt protection measures despite the challenging economic environment, Moody's said.

The Baa2 senior unsecured rating reflects the company's very strong balance sheet, healthy operating performance and good liquidity, the agency said.

The rating reflects the company's dominant position in online retailing, its well-recognized brand name and international diversification, the agency added, as well as strong supply chain and fulfillment capabilities.

The rating is constrained by Amazon's rapid growth which can potentially strain its' internal resources, business procedures and controls as well as its continued concentration in media products, which are exposed to high product volatility, according to Moody's.

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