Moody's Corp. (NYSE: MCO) cut the bond rating of Hewlett-Packard Co. (NYSE: HPQ), the No. 1 computer company, to negative and said the rating isn't likely to be raised over the next year.

The move came a week after HP, of Palo Alto, Calif., reported its worst annual loss of $12.7 billion, or $6.41 a share, after taking record writeoffs for acquisitions of EDS in 2006 and Autonomy in 2011. The company claimed the Autonomy acquisition had been based on accounting fraud.

Moody's, which put HP bonds on watch when CEO Meg Whitman held an investment conference with analysts on Oct. 3, lowered its rating on HP senior unsecured debt to “Baa1” from “A3.” It also cut its opinion on other HP debt.

The rate cut means the company will have to pay more to raise capital in the market. As well, some investors barred from buying risky debt will be precluded from buying HP bonds and notes.

“HP maintains a solid liquidity profile,” Moody's noted, citing the $11.3 billion in cash and equivalents on hand on Oct. 31, the close of its fiscal year. The ratings agency said it could revise the rating if management demonstrates “consistent execution,” as well as “steady organic revenue growth” and “adheres to its conservative financial practices.”

But Moody's also warned of a further cut if the computer company's financial position deteriorates.

Shares of HP rose 37 cents to $12.73 in Wednesday trading. The cost of protecting HP bonds from default rose about 7 percent in late trading.

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