Fitch Ratings, Chicago, said Wednesday it has assigned an AA rating to the $2.5 billion note issuance by Wal-Mart Stores, Bentonville, Ark., with a stable outlook.
The issuance, whose proceeds will be used for general corporate purposes, includes $500 million of 1% notes due in 2017; $1 billion of 3.3% notes due in 2024; and $1 billion of 4.3% notes due in 2044.
According to Fitch, the rating reflects “Walmart’s dominant market position in North America, strong position in the United Kingdom and meaningful presence in other [international] markets,” along with the company’s “low cyclicality, consistent free cash flow and steady financial leverage despite ongoing debt-financed share repurchases — balanced by a more challenging economic environment pressuring the company’s core customer base and growing competition from dollar stores and hard discounters, among others.”
Fitch said a ratings upgrade is unlikely, “given that the rating is currently at the high end of the rating spectrum and fully captures the company’s financial and qualitative strengths.”
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