S&P puts Computer Sciences on negative watch

S&P said it placed all of the ratings, including its BBB corporate credit rating, on Computer Sciences Corp. on CreditWatch with negative implications.

The negative watch placement follows news that the company has agreed to merge with Hewlett Packard Enterprise Co.'s enterprise services business, S&P said.

Computer Sciences said it intends to fund the transaction with about $3.4 billion of new debt, including the assumption of about $1.9 billion of Hewlett Packard’s existing debt, S&P said, and new equity.

The CreditWatch will be resolved once the transaction between Computer Sciences and Hewlett Packard is closed, S&P said.

The agency said it will likely lower the rating on Computer Sciences by no more than one notch and lower the commercial paper rating to A-3.

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