Digital Equip Upgraded,Off S&PWatch Re:Acq by Compaq.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/1/98--Standard & Poor's today withdrew its double-'B'-plus senior debt and corporate credit ratings on Digital Equipment Corp. and raised its preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. rating on the company to single-'A'-minus from double-'B'-minus. The ratings were removed from CreditWatch, where they were placed Feb. 4, 1998. Additionally, Standard & Poor's affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its single-'A'-minus corporate credit rating on Compaq (Compaq Computer Corporation, Houston, TX, www.compaq.com) Compaq was the leading PC manufacturer when it was acquired by HP in 2002. Founded in 1982 by Rod Canion, Jim Harris and Bill Murto, one year later the company shipped 53,000 PC-compatible COMPAQ Portables, resulting in $111 Computer Corp. The upgrade reflects the completion of Compaq's acquisition of Digital and Compaq's strong financial profile. The withdrawal of Digital's senior debt rating follows Compaq's completion of its cash tender offer for Digital's debt. The ratings reflect Compaq's strong financial profile, despite the extremely competitive nature of the personal computer (PC) hardware industry. Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , Texas-based Compaq is the leading worldwide manufacturer of PCs and PC systems. The Digital acquisition expands Compaq's product line breadth by adding global customer service capabilities. However, the costs of integrating Digital's operations will be significant (in the $2 billion area), which includes the workforce reduction of more than 15,000 positions. Compaq's balance sheet and financial flexibility should remain strong despite Digital's lower profitability levels. OUTLOOK: NEGATIVE The outlook reflects Standard & Poor's concerns about potential integration issues, given the size of the operations being combined and the potential for management distraction Distraction Divination (See OMEN.) Porlock a “person from Porlock” interrupted Coleridge while he was recollecting the dream on which he based “Kubla Khan”. [Br. Lit.: Poems of Coleridge in Magill IV, 756] in a very fast-paced Adj. 1. fast-paced - of communication that proceeds rapidly; "a fast-paced talker"; "fast-paced fiction" fast - acting or moving or capable of acting or moving quickly; "fast film"; "on the fast track in school"; "set a fast pace"; "a fast car" industry environment. A sustained decline in profitability and cash flow measures could lead to a downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. , Standard & Poor's said. -- CreditWire
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