MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it
affirmed its 'BBB+' long-term and 'A-2' short-term counterparty credit ratings
on payment solutions company MasterCard International Inc. The outlook is
stable.
The move follows MasterCard's announcement to settle its antitrust suit with
American Express (AmEx) for up to $1.8 billion with payments over three years.
The affirmation reflects MasterCard's strong capitalization and ability to
generate cash flows to absorb the payments in a relatively short period. The
possibility of a payment of that magnitude has been factored into MasterCard's
financial risk profile and is also reflected in the ratings, S&P said.
The ratings agency added although this is a material amount, the settlement
removes any uncertainty of a highly unpredictable and protracted court case and
any related potential damage to the company's franchise.
The stable outlook reflects S&P's belief that MasterCard's strong capital
position together with its strong operating cash flow capacity should be
sufficient to absorb potential judgments or settlement agreements from ongoing
litigations.
TFN.newsdesk@thomson.com
npr
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