S&P considers drop in IBM credit rating

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NEW YORK - The rating agency Standard & Poor's announced yesterday that it had placed the triple-A rating of IBM, the computer giant, on creditwatch for a possible downgrade, writes Michael Marray.

The news came on a day when heavy selling pressure hit IBM's share price as a result of reports that a special board meeting, at which a further restructuring and downsizing of the troubled company may be discussed, is planned for next week.

IBM has already made charges totalling dollars 5.4bn ( pounds 3.5bn) during 1992 to cover restructurings and workforce reductions of 40,000 staff, and fears of further restructuring charges to come - coupled with worries about the potential for a dividend cut - pushed IBM down by dollars 2.75 to dollars 62.125, not far above its 10-year low.

S&P said that its decision to put the rating on creditwatch reflected 'increased uncertainty about the company's ability to restore performance to levels consistent with a triple-A rating'.

The agency said that, although the restructuring efforts were likely to be beneficial to long-term performance, difficult market conditions in some areas were likely to make near-term progress more limited.