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Fitch rates IBM notes A
Fitch Ratings said it assigned an A rating to International Business Machines Corp.'s (IBM) €5 billion debt issuance.
The proceeds will be used for general corporate purposes, including pre-funding the acquisition of Red Hat Inc., Fitch said.
The senior notes will be pari passu with IBM's existing senior unsecured debt, the agency said.
The company has an issuer default rating of A, reflecting an expectation for continued operating challenges from IBM's business transformation, Fitch said.
But the agency said it believes recent operating performance should support near-term profitability.
Fitch said it anticipates the acquisition of Red Hat will add as much as $20 billion of debt, resulting in pro forma core leverage of more than 2.5x, which is viewed as aggressive.
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