The New York credit rating agency Standard & Poor’s Corp has delivered another blow to the once unassailable standing of IBM Corp, issuing an uneasy warning that it has become more cautious about the company’s outlook, raising the spectre that IBM could lose its long-standing and enviable triple-A credit rating. The agency has not yet gone as far as to put the ratings it places on IBM’s debt issues under review, but if the ratings were to be cut, IBM would find it more expensive to borrow money, reducing its advantage in the computer leasing business, where its ability to borrow money more cheaply than its competitors gives it a crucial edge. Standard & Poor’s changed its outlook on IBM to negative from stable because of the company’s plunging profits, weakness in the mainframe business, and the computer industry’s deteriorating outlook as it matures. Duff & Phelps Credit Rating Co lowered its rating on IBM’s debt to double-A-plus from triple-A in April (CI No 1,646), but the Chicago agency has much less influence than Standard & Poor’s or Moodys Investors’ Service Inc.
