Feeds

S&P slams Level 3 acquisition plans

Credit rating cut

  • alert
  • submit to reddit

SANS - Survey on application security programs

ComputerWire: IT Industry Intelligence

Level 3 Communications Inc's ambitions to lead the consolidation among global carriers were dealt a blow yesterday when ratings agency Standard & Poor's cut its credit rating and poured scorn on its acquisitive ambitions.

With a debt burden that led to interest payments of $646m in its last financial year, the agency fears that Level 3 could strain its financial resources by taking over other loss-making carriers. S&P analyst Michael Tsao said that given Level 3's substantial leverage, weak interest coverage and limited liquidity, "the company is not well positioned to deal with such weak industry fundamentals."

Level 3 shares had surged ahead since news in July that it had raised $500m in bonds from a group of corporate investors including Berkshire Hathaway, which is chaired by Warren Buffet. This gave the Broomfield, Colorado-based company a $1.5bn war chest. More importantly, the fact that investment sage Buffet, who has been deeply skeptical about IT stocks, is backing the company gave it the credibility it has lacked.

News that S&P had cut its rating a notch to triple C- from triple C+ led the share price fall 9% to $5.46. Currently Level 3 is eyeing Williams Communications Group Inc, the troubled telecoms carrier that has been in Chapter 11 since April.

© ComputerWire

Related stories

Level 3 bids for Chapter 11 rival
Buffet and friends sub Level 3 $500m for acquisitions
Level 3 buys Software Spectrum

Combat fraud and increase customer satisfaction

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.