Fitch Upgrades Key Ratings For TD Ameritrade

CHICAGO (AP) — Credit ratings agency Fitch Ratings on Friday upgraded two key ratings for retail brokerage firm TD Ameritrade Holding Corp. to investment-grade level.

Fitch boosted TD Ameritrade's long-term issuer default rating to "BBB" from "BB+" and its senior debt rating was upgraded to "BBB" from "BB+" as well. The upgrades move TD Ameritrade's ratings to an investment-grade level, which could help lower costs when the firm issues debt and provide greater access to debt markets.

TD Ameritrade's improving leverage, declining debt to equity and reduced reliance on transaction-based revenues were the primary driver of the upgrade, Fitch wrote in a statement. The retail brokerage has shown strong growth as more traditional brokerages have struggled in recent quarters, helping expand the client base and diverse revenue streams, Fitch added.

The planned acquisition of thinkorswim Group Inc. will also help the company expand and bolster overall profitability, the ratings agency said.

Fitch did note that TD Ameritrade could face earnings pressure during the year ending Sept. 30 as financial markets remain in flux and amid the ongoing recession. But the firm has sufficient margins to handle worsening conditions, Fitch added.

Shares of TD Ameritrade rose 16 cents to $12.95 in afternoon trading.