On May 13, 2008, Standard&Poor's Ratings Services affirmed its 'A' corporate credit ratings on Palo Alto, Calif.-based Hewlett-Packard Co. (HP) and subsidiaries. The affirmation follows the company's recent announcement that it has agreed to acquire Electronic Data Systems Corp. (EDS) for $13 billion, plus the assumption of about $3 billion of EDS debt (not including about $3 billion of EDS cash as of March 31, 2008). The outlook is stable. The affirmation reflects our view that the proposed acquisition would significantly bolster HP's market position in information technology (IT) services, and that despite a postacquisition spike in leverage, we expect HP to maintain strong financial flexibility and a modest leverage profile. Although we expect the integration of the
