Amazon.com's $1.25B Subordinated Notes Rated 'CCC+';Outlook Developing

NEW YORK (Standard&Poor's CreditWire) Feb. 1, 1999--Standard&Poor's today assigned its triple-'C'-plus rating to Amazon.com's $1.25 billion 4 ¾% convertible subordinated notes due 2009. At the same time, Standard&Poor's affirmed its single-'B' corporate credit rating on Amazon.com and its single-'B' rating on the company's $530 million 10% senior discount notes due 2008. The outlook is developing, meaning ratings could be raised, lowered, or affirmed. The ratings for Amazon.com reflect the risk of rapid growth in an evolving marketplace and Standard&Poor's expectations of negative free operating cash flow over the next several years due to more aggressive investment and diminishing benefits from its negative operating cycle. The ratings also consider the potential for margin

...NEW YORK (Standard & Poor's CreditWire) Feb. 1, 1999--Standard & Poor's today assigned its triple-'C'-plus rating to Amazon.com's $1.25 billion 4 +% convertible subordinated notes due 2009. At the same time, Standard & Poor's affirmed its single-'B' corporate credit rating on Amazon.com and its single-'B' rating on the company's $530 million 10% senior discount notes due 2008. The outlook is developing, meaning ratings could be raised, lowered, or affirmed. The ratings for Amazon.com reflect the risk of rapid growth in an evolving marketplace and Standard & Poor's expectations of negative free operating cash flow over the next several years due to more aggressive investment and diminishing benefits from its negative operating cycle. The ratings also consider the potential for margin pressure from heightened competition on the Internet. These risks are somewhat tempered by Amazon.com's current position as the leading on-line retailer of books and music. The company has also begun to offer...

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