S&P Upgrades Alphabet Ratings To AA-plus On Strong Operating Performance

By Ciara Linnane Markets MarketWatch Pulse

Standard & Poor's on Wednesday upgraded Alphabet Inc.'s corporate credit rating to AA-plus from AA and said the outlook is stable, citing the Google parent's improving operational performance of the past few years. The rating is the second highest in S&P's scale, just below the coveted AAA rating. The move "reflects Alphabet Inc.'s consistently strong operating performance, despite a challenging and evolving digital advertising market, while it continues to maintain a conservative financial policy and strong liquidity profile," said S&P Global Ratings credit analyst David Tsui. The company has a leading position in desktop and mobile search ad markets, robust technology and user data and the intellectual and financial capital to allow it to exploit new opportunities and defend itself against new competitors, said Tsui. With about $90 billion of revenue in 2016, the company is much bigger than its nearest competitor in online search and display advertising, he added. Alphabet's most active bonds, the 1.998% notes due to mature in August of 2026, were last quoted at about 93 cents on the dollar, according to MarketAxess.

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