Fitch affirms H&R Block

Fitch Ratings said it affirmed the BBB issuer default rating of H&R Block Inc. after it sold $145 million of common stock to enhance capital and maintain financial flexibility.

The outlook is stable.

Ratings reflect solid 2008 tax season results, focus on cash generation and increased retained earnings through fiscal 2009 and total debt-to-operating EBITDA ratio at 1.4 times as of July 31, according to the agency.

Strengths include the company's leading position in the consumer tax-return services market, which is expected to remain highly stable and predictable, the agency said.

Concerns include minimal diversification beyond consumer tax preparation services in the United States and underperforming non-core assets in its financial advisory business, Fitch noted.

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