Fitch downgrades Telecom's long term credit rating
Fitch forms an unsolicited opinion.
Ratings agency Fitch has downgraded Telecom's long term credit rating from A- to BBB+/Stable.
Telecom formally engages both Standard & Poor's (S&P) and Moody's Investors Service (Moody's) in relation to rating agencies services. Fitch has formed its view on an unsolicited basis, without the benefit of engaging with the company.
"Rating without request is of questionable value in a transaction of the complexity of the demerger," said Nick Olson, Telecom CFO.
"Investors should look to the informed views of S&P and Moody's as the most reliable view of debt ratings for New Telecom."
The company told NZX that, as noted in Telecom's Scheme Booklet dated 13 September, S&P expects to assign a rating of A-/Stable post demerger and Moody's have advised that, should the demerger proceed as planned, Telecom would likely be assigned a preliminary credit rating of A3/Stable.
In the build-up to its separation vote, Telecom holders of $541.7 million in "Telebond" stock and other holders of NZ-dollar denominated stock issued by Telecom NZ Finance were offered 0.50% of the scheduled redemption amount of stock held.
Additionally, if Telecom’s credit ratings from Standard & Poor’s falls to BBB+ and its Moody’s rating to Baa1, the interest rate applicable to the stock existing at the date of the demerger would increase by 0.50% per annum.
Telecom spokesman Ian Bonnar confirmed that both agencies would have to cut their ratings for the 0.50% boost to kick-in in each instance.
NBR staff
Mon, 31 Oct 2011
Mon, 31 Oct 2011
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Fitch downgrades Telecom's long term credit rating
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