A lower debt rating would have increased Shearson's cost of borrowing.

A higher debt rating would be expected to reduce a company's borrowing costs.

Moody's last week cut the company's debt ratings from a relatively high level of "junk" to a lower one.

Because of the deal, the commercial mortgage business can and will seek an independent debt rating.

Over the last year and a half, its debt rating has fallen six rungs.

Currently the state's long-term debt ratings are under close scrutiny by the rating agencies.

They could use the help - Moody's cut the debt rating of both companies to junk on yesterday.

That could have ramifications for the company's debt ratings, the analyst added.

S.& P. said the lower debt rating would affect, in total, about $13.3 billion of securities.

The senior debt rating was lowered to A, from A+.