UPDATE: S&P Raises Oracle (ORCL) to 'AA-'; Financial Policy Modifier Lifted to 'Neutral'

(Updated - April 7, 2015 11:01 AM EDT)

Standard & Poor's Ratings Services said it raised its corporate credit rating on Oracle Corp. (NYSE: ORCL) to 'AA-' from 'A+'. The outlook is stable. We also raised our issue-level rating on Oracle's senior unsecured notes to 'AA-' from 'A+'.

"We base our upgrade primarily on the revision of Oracle's financial policy modifier to 'neutral' from 'negative,'" said Standard & Poor's credit analyst Andrew Chang. "The revision is based on our expectation that the company's strong free operating cash flow (FOCF) and its current balance sheet strength will provide sufficient financial capacity to fund its growth and shareholder return objectives without detracting from its overall credit quality," Mr. Chang added.

The stable outlook reflects our expectation that Oracle will adhere to financial policies supportive of a "minimal" financial risk profile, including typically maintaining a positive net cash position, supported by a strong market position and consistent FOCF generation.

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