Moody's cuts Cable & Wireless view to negative, notes to B1

Moody's Investors Service said it changed the outlook of Cable & Wireless plc to negative from stable following continued operating difficulties at the U.K. business, which has resulted in a cash burn that has exceeded Moody's original expectations.

Concurrently, Moody's said it introduced notching between the company's corporate family rating and the rating on the its senior notes (issued via C&W and via Cable & Wireless International Finance BV), reflecting the agency's concerns over the company's weakening liquidity profile and, consequently, the increased likelihood that debt will be layered in ahead of the notes at the operating subsidiary and international group level.

Moody's affirmed Cable & Wireless's Ba3 corporate family rating and downgraded its £200 million 8¾% Eurobonds due 2012 to B1 from Ba3, £258 million 4% convertible Eurobonds due 2010 to B1 from Ba3 and Cable & Wireless International Finance's £200 million 8 5/8% guaranteed Eurobonds due 2019 to B1 from Ba3.

The outlook is negative.

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