Moody's Mulls Computer Sciences Downgrade

The move is triggered by a failure to file a 10-Q.
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Moody's is considering a downgrade of several credit ratings of

Computer Sciences

(CSC)

because of its ongoing stock options investigation and the company's

failure to file its 10-Q on time.

"The review will focus on the company's ability to get waivers from lenders and bondholders, maintain liquidity, and complete its options investigation," Moody's said in a statement.

As of Sept. 30, Moody's noted, the IT services firm had about $1.5 billion in outstanding notes, $700 million in available cash, $600 million of commercial paper and full availability on its $1 billion revolving credit facility (expiring 2011).

Moody's said the revolving credit facility has a cure period calling for CSC to file its 10-Q by Dec. 28, unless amended by lenders

The IT services company said last week in its preliminary second-quarter earnings release that it will delay the filing of its 10-Q until its stock-options probe is complete and it has determined the resulting tax and accounting fees.

The

Securities and Exchange Commission

is

investigating CSC's options practices. The company is also conducting its own investigation.

CSC shares closed the regular session at $50.77, up 97 cents.