Nortel 的债务评级被降为“垃圾”。
Nortel debt ratings cut to "junk" by Moody's
(Wraps details of downgrade, adds analyst comment, stock reaction)
By Jeffrey Hodgson
TORONTO, April 4 (Reuters) - Canada's Nortel Networks Corp. saw its debt rating slashed to ``junk'' status on Thursday by influential ratings agency Moody's, the latest blow to a telecom sector bellwether and former stock market darling.
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Brampton, Ontario-based Nortel, one of the world's largest telecommunications equipment makers, rushed to calm investors after the news. It said it had prepared for a possible downgrade and that it was ``business as usual.''
``We do not expect the ratings downgrade to have a significant impact on our day-to-day business operations,'' Nortel chief executive Frank Dunn said in a statement.
``We see the downgrade as being primarily driven by industry conditions affecting the telecom sector following the events of 2001.''
Nortel follows rivals such as Lucent Technologies Inc. (LU - news) in its downgrade to junk status. Such cuts ordinarily raise a company's borrowing costs and force investors not allowed to own junk bonds to sell.
Its stock was little changed on the news, trading flat at C$6.85 in Toronto Stock Exchange on heavy volume of more than 10 million shares. In New York Nortel fell 3 cents to $4.32.
At the peak of the market's tech boom, Nortel stock was as high as C$123. But the stock slumped as orders fell away and the company reported a string of losses, including a massive $19.2 billion loss in the second quarter of last year -- at the time one of the biggest corporate losses on record.
Dunn said Nortel it took the possibility of a downgrade into consideration when arranging its credit facilities.
But the downgrades had triggered a series of liens, pledges and guarantees against its assets to secure all of its credit agreements and outstanding public debt securities. Nortel said the liens were outlined in its previous securities filings.
One analyst who follows the firm said the downgrades were not entirely unexpected given the massive downturn in the telecoms equipment sector, and the liens would not impede its ability to operate.
``This is not a surprise to me at all...I've been telling clients that this is coming,'' the analyst said.
``I think there's no significant impact. Their interest costs go up very marginally. If you want to figure out how much they go up it's in the 10K (securities) filing.''
In cutting Nortel's ratings, Moody's said Nortel will suffer from a ``deeper and more protracted than previously anticipated'' slump in demand for its products.
Moody's cut Nortel's senior unsecured debt three notches to ``Ba3,'' its third highest junk grade, from ``Baa3,'' and its short-term debt rating to ``Not Prime'' from ``Prime-3,'' affecting some $5 billion in debt.
It said its ratings outlook remains negative.
(Additional reporting by Jonathan Stempel in New York)
Nortel debt ratings cut to "junk" by Moody's
(Wraps details of downgrade, adds analyst comment, stock reaction)
By Jeffrey Hodgson
TORONTO, April 4 (Reuters) - Canada's Nortel Networks Corp. saw its debt rating slashed to ``junk'' status on Thursday by influential ratings agency Moody's, the latest blow to a telecom sector bellwether and former stock market darling.
ADVERTISEMENT
Brampton, Ontario-based Nortel, one of the world's largest telecommunications equipment makers, rushed to calm investors after the news. It said it had prepared for a possible downgrade and that it was ``business as usual.''
``We do not expect the ratings downgrade to have a significant impact on our day-to-day business operations,'' Nortel chief executive Frank Dunn said in a statement.
``We see the downgrade as being primarily driven by industry conditions affecting the telecom sector following the events of 2001.''
Nortel follows rivals such as Lucent Technologies Inc. (LU - news) in its downgrade to junk status. Such cuts ordinarily raise a company's borrowing costs and force investors not allowed to own junk bonds to sell.
Its stock was little changed on the news, trading flat at C$6.85 in Toronto Stock Exchange on heavy volume of more than 10 million shares. In New York Nortel fell 3 cents to $4.32.
At the peak of the market's tech boom, Nortel stock was as high as C$123. But the stock slumped as orders fell away and the company reported a string of losses, including a massive $19.2 billion loss in the second quarter of last year -- at the time one of the biggest corporate losses on record.
Dunn said Nortel it took the possibility of a downgrade into consideration when arranging its credit facilities.
But the downgrades had triggered a series of liens, pledges and guarantees against its assets to secure all of its credit agreements and outstanding public debt securities. Nortel said the liens were outlined in its previous securities filings.
One analyst who follows the firm said the downgrades were not entirely unexpected given the massive downturn in the telecoms equipment sector, and the liens would not impede its ability to operate.
``This is not a surprise to me at all...I've been telling clients that this is coming,'' the analyst said.
``I think there's no significant impact. Their interest costs go up very marginally. If you want to figure out how much they go up it's in the 10K (securities) filing.''
In cutting Nortel's ratings, Moody's said Nortel will suffer from a ``deeper and more protracted than previously anticipated'' slump in demand for its products.
Moody's cut Nortel's senior unsecured debt three notches to ``Ba3,'' its third highest junk grade, from ``Baa3,'' and its short-term debt rating to ``Not Prime'' from ``Prime-3,'' affecting some $5 billion in debt.
It said its ratings outlook remains negative.
(Additional reporting by Jonathan Stempel in New York)
