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-IBM retains long-term IDR at A+ - Fitch.

M2 EQUITYBITES-June 28, 2011--IBM retains long-term IDR at A+ - Fitch(C)2011 M2 COMMUNICATIONS

28 June 2011 - Fitch yesterday retained long-term issuer default rating (IDR) of US IT and software giant IBM (NYSE:IBM) and its subsidiary IBM International Group Capital LLC at A+.

In addition, the agency upheld IBM's senior unsecured revolving credit facility (RCF) at A+, the senior unsecured debt rating at A+ and the short-term IDR at F1. Furthermore, Fitch confirmed the F1 commercial paper rating on IBM.

The outlook on the ratings is "stable".

The company's ratings mirror IBM's strong company profile, excellent financial flexibility and good management strategy. At the same time, the ratings are constrained by the risk of increasing debt on the back of sizable share buybacks and/or acquisitions that could lead to reduction of the credit protection measures, Fitch said.

Other weaknesses include the significant rise in cash dividends which would affect IBM's free cash flow and financial flexibility and the possibility of lower cost and benefit because of the outlook for the industry demand, the agency explained.

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Publication:M2 EquityBites (EQB)
Date:Jun 28, 2011
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