S&P downgrades IBM, debt to A+

S&P said it lowered its corporate credit and issue-level ratings on International Business Machines Corp. (IBM) to A+ from AA-.

The outlook is stable.

The agency also downgraded the short-term rating on the company's commercial paper to A-1 from A-1+, with no change to the assessment of the company's strong liquidity profile.

"The downgrade reflects IBM's transformation with operating declines in recent years as it reinvests and repositions its business to achieve better performance and our expectation that the transition to operating stability will take longer than we had previously forecast," S&P credit analyst John Moore said in a news release.

"We forecast less improvement to operating margins over the next two years compared with our previous expectations, with higher investment in the company's turnaround. We expect IBM to sustain leverage in the 1.5x-2x area through 2018, compared to leverage of 1.3x on March 31, 2017."

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