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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: hlpinout who wrote (95787)	3/7/2002 10:21:13 AM
From: Elwood P. Dowd	Respond to of 97611

S&P cuts Hewlett-Packard on Compaq merger risks NEW YORK, March 7 (Reuters) - Standard & Poor's cut Hewlett-Packard Corp.'s (NYSE:HWP - news) long-term debt rating three notches and short-term debt rating two notches because of risks arising from the computer and printer maker's proposed merger with computer maker Compaq Computer Corp. (NYSE:CPQ - news). Palo Alto, California-based Hewlett-Packard on Wednesday won Federal Trade Commission approval for the nearly $22 billion all-stock merger with Houston-based Compaq, a day after the Institutional Shareholder Services advisory firm endorsed the link-up. A Hewlett-Packard shareholder vote is scheduled for March 19. S&P cut Hewlett-Packard's senior unsecured debt three notches to ``A-minus,'' its fourth lowest investment grade, from ``AA-minus,'' and its short-term debt rating to ``A-2'' from ``A-1-plus.'' It warned of the possibility of further downgrades, which ordinarily raise borrowing costs. ``While the merger offers the scale and market positions in hardware that could lead to greatly improved profitability, the execution risks are significant,'' S&P analyst Martha Toll-Reed said in a press statement. Moody's Investors Service rates Hewlett-Packard's long- and short-term debt ``A2'' and ``P-1,'' each one notch above S&P's new ratings. Hewlett-Packard shares traded Thursday morning on the New York Stock Exchange at $20.04, down 14 cents.