Hewlett-Packard (HPQ) Placed on CreditWatch Negative by S&P

Standard & Poor's Ratings Services today said it placed its 'BBB+' corporate credit rating on Palo Alto, Calif.-based Hewlett-Packard (NYSE: HPQ) , as well as the issue ratings on HP's debt, on CreditWatch with negative implications. We also placed the 'A-2' commercial paper rating on CreditWatch negative.

"The CreditWatch placement follows HP's announcement that it plans to separate into two public companies in 2015 through a tax-free transaction," said Standard & Poor's credit analyst Martha Toll-Reed.

One of the new companies will comprise HP's enterprise technology infrastructure, software, and services businesses, and will do business as Hewlett-Packard Enterprise, and the other will comprise HP's personal systems and printing businesses and will do business as HP Inc. While the separation will provide greater focus at each new company, it will also diminish HP's business diversity.

We will monitor developments related to the proposed transaction, including required approvals. We will meet with each of the new management teams to review and assess their business strategies and subsequent capital structures, as well as their ongoing financial policy. Although HP has stated its goal is to achieve investment-grade ratings on each of the new companies, at this point we do not have sufficient details and will assess the business and financial risk profiles of each entity before making a rating determination.

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