Debt issuance for the U.S. technology industry will increase to record levels in 2007 with total outstanding technology debt expected to rise 50% to more than $180 billion, as discussed in the inaugural edition of Fitch Ratings' quarterly "Tech Download".

For the first half of 2007, technology industry debt issuance remained strong due mostly to a continuation of leveraged buyout (LBO) and strategic M&A activity, along with a majority debt-financed $12.5 billion accelerated share repurchase (ASR) by International Business Machines (IBM). Fitch expects the second half of 2007 to be even stronger for debt issuance due to the significant amount of announced LBO transactions, potentially led by $24 billion of debt associated with the LBO of First Data Corp.

"Higher debt levels have and will continue to weaken credit metrics for the technology industry," said Nick P. Nilarp, Managing Director, Fitch Technology Team. "That said, financial flexibility within the industry remains strong and free cash flow is solid."