S&P Hikes Amazon.com Corporate Credit Ratings (AMZN)

Standard & Poor’s Ratings Services has raised its corporate credit rating on Amazon.com (NASDAQ: AMZN) to ‘BB+’ from ‘BB’. While this is still junk status, it is now just a notch under "investment grade" rated for corporate credit ratings.  Amazon has also been removed from CreditWatch with positive implications that were imposed in February.

S&P raised the rating on the company’s 4.75% convertible subordinated notes due February 2009 and its 6.875% premium adjustable convertible securities to ‘BB+’ from ‘B+’ and assigned both issues a recovery rating of ‘3’.  That indicates the expectation of meaningful  recovery noted as a 50% to 70% in the event of default and the outlook is positive.

This reflects Amazon’s trailing 12-month growth rate of 39.4% as of March 31, as well as its  ability to manage sustained growth with beneficial impact on credit measures from the recent redemption of the $500 million 4.75% convertible subordinated notes.

Jon C. Ogg
June 11, 2008