| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers A > Headlines for Alcatel SA > News item |
Moody's downgrades Alcatel, lifts Lucent bonds to Ba3
Moody's Investors Service said it downgraded to Ba2 from Ba1 the corporate family rating, senior unsecured bank credit facility and senior unsecured bonds and convertibles bonds of Alcatel SA, which has completed its merger with Lucent Technologies Inc. and been renamed Alcatel-Lucent. The Not-Prime rating for short-term debt was affirmed.
At the same time, Moody's raised the ratings for Lucent's senior debt to Ba3 from B1, reflecting both the standalone credit profile of Lucent and, given the strategic importance of Lucent to round off the group's product range and regional presence, expected financial support from Alcatel-Lucent, although this is not formally committed at this time. The ratings for the other legacy debt of Lucent were raised to B2 from B3 for subordinated debt and trust preferreds.
The outlook is stable, and this concludes the reviews begun on April 3, 2006.
The agency said the ratings assume that management of the two entities will be fully integrated over the next several months and that all of Lucent's non-U.S. activities will be merged with their Alcatel counterparts, which should result in a rapid convergence of the credit risks of the affected companies.
The downgrade reflects execution challenges related to the integration of two large companies while keeping major customers, market share and key personnel in an increasingly competitive telecommunication equipment market, but also the broad market position of Alcatel-Lucent and the potential for realizing and retaining substantial cost-savings that could drive EBITA-margins into the high single-digits medium-term, the agency said.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.