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DUFF & PHELPS LOWERS IBM'S SENIOR DEBT TO 'A'; ASSIGNS INITIAL RATINGS TO COMMERCIAL PAPER, PREFERRED STOCK

 NEW YORK, Sept. 10 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has downgraded IBM's senior debt rating to "A" (Single-A) from "AA-" (Double-A-Minus), and removed the company from Rating Watch, where it was placed on Dec. 16, 1992. D&P has also assigned initial ratings of Duff 1 to IBM's commercial paper and "A-" (Single-A-Minus) to its preferred stock, and a Duff 1 and "A" (Single-A) to the commercial paper and senior long-term debt of IBM's affiliates. The following table summarizes these rating changes.
 Rating Change
 Issuer Debt Type From To
 International Business
 Machines Corp. Senior Debt AA- A
 Pfd. Stock NR A-
 Comm. Paper NR Duff 1
 IBM Credit Corp. Senior Debt NR A
 Comm. Paper NR Duff 1
 IBM International
 Finance N.V. Senior Debt NR A
 Comm. Paper NR Duff 1
 IBM Associates Limited
 Partnership Comm. Paper NR Duff 1
 IBM Japan Limited Senior Debt NR A
 The ratings reflect the substantial changes occurring at IBM as well as the dynamics of the computer industry. Although the substantial restructuring charges taken in 1992 and 1993 will ultimately result in considerable cost savings, significant cash outflow will occur for the remainder of this year and in 1994. In addition, the business environment continues to be extremely competitive, which could limit or delay the expected benefits from company downsizing.
 While the timing of a turnaround is difficult to predict, IBM is focusing on minimizing the decline in hardware sales and strengthening its non-hardware businesses. The prudent steps taken by the company to improve its liquidity and maintain financial flexibility are key to the Duff 1 commercial paper rating. IBM has increased its committed lines of credit, further reduced common stock dividends, and issued $1.1 billion of preferred stock and $1.8 billion of long-term debt.
 The rating recognizes that IBM has not generated positive cash flow from operations after capital expenditures and investments in software over the past three years. Thus, a return to a respectable level of profitability along with debt reduction, which D&P expects, will be critical to maintaining the current rating level.
 -0- 9/10/93
 /CONTACT: Thomas P. Razukas, CFA, 212-908-0200, or Matthew D. Robbins, CFA, 312-368-3120, both of Duff & Phelps Credit Rating Co./
 (IBM)


CO: IBM ST: New York IN: CPR SU: RTG

TW -- NY028 -- 0712 09/10/93 11:20 EDT
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Date:Sep 10, 1993
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