S&P assigns AA to Alphabet notes

Standard & Poor's said it assigned its AA issue rating to Alphabet Inc.'s senior unsecured notes due 2021 and senior unsecured notes due 2024.

Alphabet will issue the senior unsecured notes in exchange for the senior unsecured notes at Google Inc., the fully owned subsidiary of Alphabet, of the same tenor and coupon and in principal amounts equal to the principal amounts of the Google Inc. notes tendered into the exchange offers.

The company’s liquidity is exceptional, with cash and marketable securities totaling about $75.3 billion as of March 31, of which about $30 billion was held domestically, the agency said.

S&P expects Alphabet to generate free operating cash flow in excess of $17 billion, an amount sufficient to repay $1 billion of senior unsecured notes maturing in May 2016, pursue tuck-in acquisitions, and complete a portion or all of its share repurchase authorized, which had $1.4 billion outstanding as of March 31.

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