Fitch downgrades HP to BBB+

Fitch Ratings said it downgraded the long-term ratings of Hewlett-Packard Co. to BBB+ from A-, removed the ratings from Rating Watch Negative and assigned a stable outlook.

The short-term ratings were affirmed at F2.

At the same time, the agency noted the change in the company's name to HP Inc. from Hewlett-Packard following the completion of the company's separation from Hewlett-Packard Enterprises Inc. on Nov. 1.

The ratings affect $6.8 billion of debt.

Fitch said the ratings reflect expectations for solid operating results despite secular demand challenges in HP's core markets. The business separation will support operating profit margin expansion and solid annual free cash flow (Fitch defined as after dividends). A commitment to conservative financial policies through the rating horizon and investments in adjacent growth markets in the long-term should offset Fitch's expectations for sustained top-line pressures in core markets, the agency said.

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