S&P upgrades Red Hat

Standard & Poor's said it raised its corporate credit rating on Red Hat Inc. to BB- from B+.

The outlook is stable.

The agency said the upgrade reflects Red Hat's consistent growth in revenues and operating earnings and improving financial profile. Its rating is supported by the barriers to entry provided by the large number of independent software and hardware vendors, who certify their products to work with Red Hat, and liquidity and cash flow that are strong for the rating level.

The rating on Red Hat continues to reflect the company's relatively narrow business profile, modest scale relative to other rated software companies, rapid technology evolution and high leverage, S&P said.

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