S&P rates Salesforce.com notes, loan A-

S&P said it assigned its A- issuer credit rating to Salesforce.com Inc. The outlook is stable.

S&P also assigned an A- issue-level rating to the company's proposed senior unsecured notes and existing $500 million term loan.

“Our rating on Salesforce reflects the company's leadership position in the fast growing customer relationship management (CRM) software industry; strong, consistent track record of revenue growth due to the recurring nature of its subscription business model; and good cash flow metrics characteristic of the SaaS industry,” S&P said in a news release.

“Partial offsets include strong competition from established technology firms with significant financial resources that are looking to expand their cloud offerings; lower profit margin than that of similarly rated peers, as the company continues to spend heavily on sales and marketing to drive revenue growth; and somewhat aggressive acquisition strategy that we believe could lead to credit metrics exceeding our expectations.”

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