Feeds

Moodys cuts Nortel and Lucent ratings (again)

Networking junkies

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

Credit rating agency Moody's Investors Service delivered a bleak verdict on the telecom equipment sector's prospects on Friday, when it downgraded Nortel Networks Corp and Lucent Technologies Inc from junk to even junkier.

The rating on Lucent's senior unsecured and senior implied debt was cut from B2 to Caa1. Lucent's trust preferred stock was cut from Caa1 to Caa3, and preferred stock from Caa2 to Ca. Nortel's senior secured and senior implied rating was cut from Ba3 to B3, and its preferred stock from B3 to Caa3. Bonds rated by Moody's at Ba or below are considered to be in the junk category. The outlook for both companies was rated negative.

Moody's used eerily similar language when describing the problems facing both companies. It said that the downgrade reflected the severity of the decline in each firm's revenue base, their cash burn rates and the "lack of clarity regarding the nature and timing of a rebound in revenue." It also cited reduced liquidity sources in the case of Lucent and diminished financial flexibility in the case of Nortel.

Offsetting the bleak prospects facing both firms, Moody's cited their large cash balances and their reduced cost structures. However, both firms are likely to see their cash come under pressure over the coming year, with carriers likely to continue cutting their spending at least through next year.

© Computerwire

Secure remote control for conventional and virtual desktops

More from The Register

next story
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.