Moody’s affirms Wal-Mart

Moody's Investors Service said it affirmed all ratings of Wal-Mart Stores, Inc., including the Aa2 senior unsecured and Prime-1 commercial paper ratings.

The stable outlook is continued.

"We view Walmart's announcement today that it is increasing its share repurchase authorization to $20 billion, which is roughly $11 billion in 'new' availability, to be executed over the next two years or so, as within our band of tolerance for the ratings, especially as no new debt is necessary to execute the plan," Moody's vice president Charlie O'Shea said in a news release.

We have historically factored a reasonable amount of share buybacks into our ratings, and over the past six quarters, Walmart has been well-below that amount as it has put the brakes on repurchases to accommodate its store and online investments, resulting in a reasonable amount of 'catch-up' availability."

"In addition, the company has deleveraged through both sizeable debt repayments as well as with our recent reduction in lease multiple to 5 times from 8 times, creating additional cushion within our 35% retained cash flow/net debt ratings trigger. Finally, we anticipate cadence for the repurchases to be prudent," O’Shea added in the release.

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