Telecom shares (NZX: TEL) had fallen 3.5% to $1.89 in mid afternoon trading, a fresh all-time low.READ ALSO: Out of the darkness, Telecom gets its first ‘buy' ratingOver the past nine trading days, the company has either slipped or stayed flat
Telecom shares (NZX: TEL) had fallen 3.5% to $1.89 in mid afternoon trading, a fresh all-time low.
READ ALSO: Out of the darkness, Telecom gets its first ‘buy’ rating
Over the past nine trading days, the company has either slipped or stayed flat in every session, and it is now dramatically off its 52-week high of $2.88.
Yesterday morning, Telecom said it was considering structural separation.
After the market closed, Standard & Poors downgraded the company’s long term credit rating from stable to negative, a move agency said was prompted by the structural separation talk.
“It means the sale of AAPT might be slightly more pertinent now to facilitate debt paydown pre-separation,” First NZ Capital analyst Greg Main told NBR after the S&P downgrade.
Telecom has spent upwards of $2 billion on its fully-owned Australian subsidiary, but most analysts value it today around the $A400 million mark. Chief executive Paul Reynolds has recently said his company will consider offers.
Forsyth Barr’s Guy Hallwright was more relaxed about the rating change, telling NBR theshort-term impact would be limited: "They don’t have any refinancing to do for the next year or two so no impact in the short term. Longer term it will slightly increase borrowing costs - but only by a fraction of a percent."
Mr Main said the S&P downgrade “highlights the continuing uncertainty and likely investor caution until more details [about Crown fibre] are known”.
Sign up to get the latest stories and insights delivered to your inbox – free, every day.
