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IBM CORP., UNITS SENIOR DEBT RATED 'A', COMMERCIAL PAPER 'F-1' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 15 /PRNewswire/ -- IBM Corp.'s $4.7 billion senior debt is rated 'A', $3.5 billion commercial paper 'F-1', and preferred stock 'A-' by Fitch. In addition, initial ratings are assigned as follows: IBM Credit Corp. senior debt 'A' and commercial paper 'F-1'; IBM International Finance N.V. senior debt 'A' and commercial paper 'F- 1'; IBM Japan Ltd. senior debt 'A'; and IBM Associates LP commercial paper 'F-1'. The credit trend is stable.
 IBM's ratings reflect its product and geographic diversity, market, product, and research leadership, and solid financial resources. Concerns include large cash requirements over the next two years from the recent restructuring, continued decline of the company's mainframe business, the related vulnerability of the maintenance and software businesses, and potential vulnerability of its midrange computer product. Financial concerns include rapid increases in leverage and a loss of investor confidence. The ratings assume new management will successfully return the company to more stable financial ground. While most of the progress will not be seen on the balance sheet until 1995, any problems causing decreased cash flow and higher leverage could result in a rating downgrade. Liquidity remains adequate to meet maturing debt and fund operations.
 Concerns are mitigated by IBM's steps to bolster liquidity and reposition the company competitively, enabling shorter product development time and offering customers lower-cost, higher-performance products. While the mainframe business is subject to continued margin pressure, the personal computer business has shown progress as evidenced by improved margins and volumes. Expenses have been cut aggressively to reflect the downsized business opportunities in IBM's historical areas of market strength. Because of its large franchise, IBM also is positioned to benefit from several growth sectors of the market, including information technology services and the greater commercialization of its progressive research effort.
 With the finance operations appropriately capitalized and healthy at less than 7.0 times debt to equity, total debt to capital rose to 61.6 percent at June 30, 1993 from 51.5 percent at Dec. 31, 1992 and 42.3 percent at Dec. 31, 1991, reflecting increased debt at nonfinancial operations. Through spending reductions, dividend cuts, and other cash conservation measures, management aims to reduce debt levels.
 -0- 9/15/93
 /CONTACT: Donald H. Powell, 212-908-0570, or Nancy Stroker, CFA 212-908-0533, of Fitch/
 (IBM)


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

LD -- NY088 -- 2410 09/15/93 16:27 EDT
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Publication:PR Newswire
Date:Sep 15, 1993
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