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Standard & Poor's Boosts Red Hat's Corporate Credit Rating

Dave Courbanou

December 28, 2011

1 Min Read
Standard & Poor's Boosts Red Hat's Corporate Credit Rating

Not too long ago we covered Red Hat’s Q3 2011 earnings, which was cause for concern for some. Despite the company meeting or exceeding its financial predictions, Red Hat’s stock price took a dip. But there is some good news: Red Hat’s positive earnings have earned the company a corporate credit rating bump. How big of a bump? Read on …

Standard and Poor’s has upgraded Red Hat’s BB+ rating to a BBB-, thanks in part to Red Hat’s “strong recurring revenue and consistent earnings growth,” specifically “in the face of economic downturn.” Red Hat CFO Charlie Peters notes Red Hat “is now considered Investment Grade,” and now can tap into more “debt capital markets, at a lower cost.”

While it’s doubtful there will be any massive new technology coming from Red Hat as a result of this rating boost, the fedora-clad company may make more bold moves (such as acquisitions), potentially accelerating its already respectable growth.

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