Moody’s assigns A1 to Cisco debt

Moody's Investors Service said it assigned an A1 rating to Cisco Systems, Inc.'s proposed senior unsecured debt offering.

The outlook is stable.

Proceeds will be used to bolster the company's U.S. cash balances and support the company's shareholder return programs.

Moody’s said the A1 long-term rating reflects Cisco's dominant market position within the network equipment industry due to its broad product portfolio, strong technology development capabilities and scale of operations. Its deeply entrenched position within existing networks is a key advantage that helps the company maintain market share and grow in adjacent markets.

The rating also considers Cisco's strong debt protection measures (gross adjusted debt to EBITDA projected under 1.5 times), an outstanding liquidity profile ($60 billion of cash and liquid investments), and Moody’s expectations for continued strong profitability and over $6 billion of free cash flow over the next year.

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