Moody's drops Mitel

Moody's Investors Service said it downgraded Mitel Networks Corp.'s corporate family rating and probability of default rating to Caa1 from B3 while also revising the company's outlook to negative from stable.

The primary influence behind the rating actions is Moody's expectation that the prevailing business environment will cause the recent sequence of year-over-year revenue declines to persist and that earnings and cash flow generation will continue to be pressured through the near to mid-term, the agency said.

The combination of Mitel's history of poor free cash generation, very limited earnings visibility as North American general economic activity continues to be weak, and the company's recent write-down of the carrying value of its acquired InterTel business, serve to substantiate the view that Mitel may struggle to generate meaningful free cash over the next six to eight quarters, and in turn, that leverage and coverage metrics are likely to be quite weak, Moody's 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.