OREANDA-NEWS. S&P Global Ratings today assigned its 'AA+' issue-level rating to Cupertino, Calif.-based global hardware and services provider Apple Inc.'s U. S. dollar-denominated senior unsecured notes due 2019, 2021, 2026, and 2046. The company will use the proceeds from the notes for general corporate purposes, including the repurchase of common stock and payment of dividends. We rate the new notes the same as the corporate credit rating on the company. Our 'AA+' corporate credit rating on Apple is unchanged, and the outlook remains stable.

Apple's financial risk profile is considered minimal. Despite the proposed debt issuance, the company will maintain a significant net cash position and we view its financial policy as conservative. Our rating and outlook incorporate the company's ongoing substantial share repurchases and intention to increase dividends on an annual basis. We note that we net Apple's surplus cash (adjusted for potential repatriation taxes, among other factors) against debt when calculating credit metrics per our criteria. Although we expect total shareholder returns to exceed free operating cash flow on occasion, robust overall cash generation affords the company the flexibility to return large amounts of cash to shareholders without detracting from the overall credit quality.

Apple's third-quarter earnings reflect material slowdown in iPhone demand after a robust fiscal 2015. Its revenues fell 15% year over year to $42.4 billion as a 15% unit decline in iPhone sales, similar weakness across iPads and Macs, and currency headwinds weighed on the top line.

Given the maturing smart phone market and strong comparison versus a record fiscal 2015, we expect the company to face additional headwinds over the near term. But our view of Apple's strong business risk profile remains unchanged given its expanding ecosystem (partly reflected in its services segment) and its leadership position as a premium product with strong consumer loyalty.