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This excerpt taken from the HPQ 10-Q filed Mar 11, 2010. CAPITAL RESOURCES Debt Levels We maintain debt levels that we establish through consideration of a number of factors, including cash flow expectations, cash requirements for operations, investment plans (including acquisitions), share repurchase activities, overall cost of capital, and targeted capital structure. Outstanding borrowings increased to $15.9 billion as of January 31, 2010 as compared to $15.8 billion at October 31, 2009, bearing weighted average interest rates of 2.7% each at January 31, 2010 and October 31, 2009. During the first three months of fiscal 2010, we issued $2.5 billion and repaid $2.4 billion of commercial paper. As of January 31, 2010, we had $22 million in total borrowings collateralized by certain financing receivable assets. Our weighted-average interest rate reflects the average effective rate on our borrowings prevailing during the period; it factors in the impact of swapping some of our global notes with fixed interest rates for global notes with floating interest rates. For more information on our interest rate swaps, see Note 9 to the Consolidated Condensed Financial Statements in Item 1, which is incorporated herein by reference. For more information on our borrowings, see Note 12 to the Consolidated Condensed Financial Statements in Item 1, which is incorporated herein by reference. Available Borrowing Resources At January 31, 2010, we had the following resources available to obtain short-term or long-term financings if we need additional liquidity:
63 Our credit risk is evaluated by three independent rating agencies based upon publicly available information as well as information obtained in our ongoing discussions with them. The ratings for the fiscal year ended October 31, 2010 were:
We do not have any rating downgrade triggers that would accelerate the maturity of a material amount of our debt. However, a downgrade in our credit rating would increase the cost of borrowings under our credit facilities. Also, a downgrade in our credit rating could limit our ability to issue commercial paper under our current programs. If this were to occur, we would seek alternative sources of funding, including drawdowns under our credit facilities or the issuance of notes under our existing shelf registration statements. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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