Moody's has revised Legg Mason Inc.'s ratings outlook to stable from negative and affirmed its senior unsecured debt rating at Baa1.

The ratings outlook change to stable reflects the progress Legg Mason has made in integrating the acquisitions it undertook in late 2015 and early 2016, for which it incurred $1.2 billion of debt, Moody's said.

However, leverage remains elevated above the levels that existed prior to the acquisitions and the rating agency remains concerned about pressure on the company's financial flexibility.

The rating agency noted that the company's investment performance has improved over the past year while leverage as a multiple of EBITDA has declined to 3.3x as revenues have increased to their highest levels since the financial crisis. Additionally, earnings have improved with declining integration costs, Moody's said.

Moody's believes that these developments have stabilized Legg Mason's credit profile.