Fitch affirms IBM

Fitch Ratings said it affirmed the ratings of International Business Machines Corp. and IBM International Group Capital LLC, including their A+ long-term issuer default ratings, A+ senior unsecured debt and F1 short-term issuer default and commercial paper ratings as well as IBM's A+ senior unsecured credit facility.

The outlook is stable.

The agency said the ratings and outlook reflect IBM's solid credit protection measures for the A+ rating category; significant liquidity supported by a solid cash position and strong and consistent free cash flow; considerable recurring revenue from information technology services, software and financing; highly diverse customer base from both an industry and geographic perspective; and breadth and quality of product and service offerings, resulting in leading market share in IT services, middleware software, servers and No. 2 share of the total disk storage market.

Fitch said ratings concerns include the risk of core debt (non-financing) increases to achieve financial and/or business objectives, such as sizable debt-financed share repurchases and/or acquisitions, and consistent, material increases in cash dividends long term, which could pressure free cash flow and financial flexibility in the absence of commensurate growth in profitability, thereby necessitating further increases in core debt to fund acquisitions and/or share repurchases.

Total leverage was 1.1 times at March 31.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.