HP and Compaq: HP cuts extend to its credit rating

NEWS Ratings agency Moody's has cut HP's credit rating after it acquired the lesser-rated company Compaq. HP's credit rating dropped from A2 down two levels to Aa3. Moody's said in a statement that this is due to HP taking on a lesser-rated company's debt. With Monday's $25bn merger, HP absorbed Compaq's outstanding debts of $1.04bn on top of its own debts, which total $4.6bn. The Moody's statement also said the credit outlook remained negative. However the credit rating agency did say that "baa2" rated Compaq was now being reviewed for a possible credit rating upgrade because of the higher rated HP acquisition.