Moody's downgrades HP credit rating Moody's delivered another blow to Hewlett-Packard's floundering turnround efforts on Wednesday when the credit rating agency lowered its outlook on the IT group's long-term debt. Moody's review was initiated before HP announced last week that it had written off $8.8bn in relation to its acquisition of Autonomy, the UK enterprise software company. The concerns set out by the agency are largely unrelated to that deal and its accompanying allegations of accounting improprieties, underlining the fundamental challenges facing Meg Whitman, HP chief executive. Moody's cut its rating of HP's senior unsecured credit by one notch to Baa1, in the lower-medium grade range, and said it was unlikely to raise it again over the next year. "Although HP will maintain strong to leading positions in a number of product areas, the company's credit profile will remain weaker than previously expected over the intermediate term," said Moody's senior vice president, Richard Lane. HP's core businesses of PCs, servers, printers and enterprise services, which comprise more than three-quarters of its revenues, will face slow to no growth prospects over the coming years," Mr Lane said. He forecast that revenues will fall by 5 per cent next year, putting pressure on profit margins. Corporate restructuring and the lack of growth meant Moody's cut its forecast free cash flow for next year by $3bn to around $4bn. HP has around $11.3bn in cash and cash equivalents and access to a further $7.5bn in bank facilities in the coming years, with Moody's saying that the computer maker has "ample room" under its lending covenants. Nonetheless, its debt maturities next year total $5.5bn, with a further $8.1bn due before the end of 2015, constraining its ability to make the acquisitions that may be required to remain competitive. HP declined to comment. The rating cut did not prevent a rally in the company's shares, which closed 3 per cent higher at $12.73 in New York. This week, HP and its current and former executives received their first lawsuits from investors over alleged mishandling of the $11bn acquisition of Autonomy last year. Autonomy's founder and former chief executive, Mike Lynch, has vigorously denied HP's allegations of misconduct and financial irregularities. On Monday he wrote an open letter to HP's board demanding a more detailed explanation of its allegations. Mr Lynch left HP in May.