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S&P upgrades video game publisher Electronic Arts on low leverage

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S&P upgrades video game publisher Electronic Arts on low leverage

S&P Global Ratings upgraded Electronic Arts Inc.'s corporate credit rating to BBB+ from BBB on March 20, saying the U.S. video game company was expected to maintain low leverage in 2018 and 2019.

The issue-level rating on the company's senior unsecured notes was also raised to BBB+ from BBB. The outlook was stable.

The rating agency said Electronic Arts' strong cash flow generation will keep leverage low amid continued growth in its portfolio of leading game titles and live services.

Electronic Arts' cash flow from operations is projected to be about $1.5 billion to $1.6 billion in fiscal 2019, according to S&P.

S&P also expects the video game publisher to be able to move cash back to the U.S. more efficiently due to the new tax law.

Electronic Arts could get another rating upgrade over the next one to two years by improving its business diversification, reducing its reliance on a few key titles and expanding its mobile revenue, S&P said.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.