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S&P Ratings News September 22, 2008, 11:01AM EST

Microsoft Joins the Triple-A Club

The software giant is added to the select list of nonfinancial U.S. companies with S&P's highest credit rating

From Standard & Poor's RatingsDirect

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The exclusive U.S. triple-A ratings club—those nonfinancial U.S. corporations with Standard & Poor's top credit rating—gained a new member on Sept. 22. Standard & Poor's Ratings Services assigned its AAA corporate credit rating and A-1+ short-term and commercial paper ratings to Redmond (Wash.)-based Microsoft Corp. (MSFT). The outlook is stable.

  U.S. Corporate AAA Issuers (as of Sept. 22, 2008)

Issuer Name Rating Rating Date
Automatic Data Processing Inc. (ADP) AAA/Stable/A-1+ 27-Mar-02
Exxon Mobil Corp. (XOM) AAA/Stable/A-1+ 6-Dec-99
General Electric Co. (GE) AAA/Stable/A-1+ 23-Nov-81
Johnson & Johnson (JNJ) AAA/Stable/A-1+ 18-Sep-87
Microsoft Corp. (MSFT) AAA/Stable/A-1+ 22-Sep-08
Pfizer Inc. (PFE) AAA/Negative/A-1+ 4-Dec-06

The list was thinned to just five names in January as United Parcel Service (UPS) saw its Standard & Poor's credit rating downgraded (BusinessWeek.com, 1/10/08) to AA- from AAA. The number of AAA-rated U.S. nonfinancials has fallen sharply from a peak of 32 in the early 1980s (BusinessWeek.com, 3/11/05).

Changes in financial policy, which basically translate into a change in corporate risk orientation, have figured importantly in the fall from AAA for some pretty significant companies, including Coca-Cola (KO), Procter & Gamble (PG), DuPont (DD), and Federated Department Stores. For others, such as Ford (F), General Motors (GM), Eastman Kodak (EK), Bristol-Myers Squibb (BMY), Sears (SHLD), and AT&T (T), changes in the business environment were the key ingredient in their credit quality decline.

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