S&P ups Veritas ratings

Standard & Poor's said it raised its corporate credit rating on Veritas Software Corp. to BB+ from BB and its subordinated rating to BB- from B+.

The outlook is stable.

S&P said the upgrade reflects Veritas' good execution during a difficult information technology spending environment and growth opportunities that include products, platforms, and geographies.

The ratings on VERITAS reflect a narrow product and revenue base, very competitive industry conditions, and a moderately aggressive acquisition strategy. These factors are tempered by a good niche market position and adequate financial flexibility to support the company's growth initiatives.

The agency noted the company has generated more than $400 million in free cash flow over the past two years, while total debt to EBITDA is less than 2x. While profitability and cash flow measures are solid, with operating margins in the upper 20% area, the company's growth strategy does inject a degree of uncertainty around future financial performance.

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