Moody's may cut Affiliated Computer

Moody's Investors Service said it placed the ratings of Affiliated Computer Services Inc. under review for upgrade following the announcement that Xerox Corp. has entered into a definitive agreement to acquire Affiliated Computer for about $6.4 billion plus the assumption of $2 billion of Affiliated Computer debt.

Both boards of directors have approved the transaction, which, subject to shareholder and regulatory approval, as well as customary closing conditions, is expected to close in the first quarter of 2010, the agency noted.

According to Moody's, ratings placed under review for possible upgrade include the corporate family rating at Ba2 and senior secured notes at Ba2.

The existing Ba2 corporate family rating for Affiliated Computer reflects the concentrated voting control of Affiliated Computer's chairman, which has raised concerns over the independence and effectiveness of board oversight, the agency said.

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