S&P lowers Qualcomm

S&P said it lowered the long-term issuer credit rating to A- from A and the short-term rating to A-2 from A-1 on Qualcomm Inc.

The agency also said it removed all of the ratings from CreditWatch, where they were placed with negative implications in February.

The outlook is negative.

The agency also said it lowered the rating on Qualcomm's senior unsecured debt to A- from A and the commercial-paper rating to A-2 from A-1.

The downgrades reflect an expectation that Qualcomm's adjusted leverage will exceed 2x over the near term as the company depletes much of its cash balances for share repurchases of up to $30 billion over the next five quarters, S&P said, and that it may remain at higher than 2x if operating performance does not improve.

But the company's credit metrics could improve quickly should it reach a resolution with customers currently in licensing disputes, the agency added.

The downgrade also reflects weakening of its overall business risk profile in recent years as the smartphone industry matures and competition intensifies, S&P said.

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