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CompUSA Inc has won an upgrade from Moody’s Investors Service Inc, which raised its rating on the Dallas computer retailer’s $110m of subordinated debt to single-B-1 from single-B-2 and upgraded an its existing $75m revolving credit line to Ba2 from Ba3. It assigned a prospective rating of (P)Ba2 to a new $150m three-year revolving credit line that will replace the existing one. The upgrades reflect CompUSA’s improved financial strength and its increasing share of what Moody’s believes is a growing US market for personal computers, service and accessories. But the ratings also reflect price competition from regional chains and electronic superstores such as Best Buy Co and Circuit City Stores Inc, as well as industrywide inventory risk due to returns and obsolescence, Moody’s said.

IBM Corp got a clean bill of health from Standard & Poor’s Corp after its 100-year debenture issue, with the ratings agency assigning its single-A’ rating to the issue and affirmed all the other outstanding ratings on the company. The ratings reflect the company’s strong and broad base of technology and its financial strength and flexibility, the agency says, warning that this is partly offset by a highly competitive environment and the continuing challenges of redirecting its focus from the mature, but important and highly profitable enterprise server businesses towards lower margined, but growing, areas such as personal computers, client server-computing, and computer services.

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CBR Staff Writer

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