S&P downgrades Ericsson to BBB-

S&P said it lowered its long-term corporate credit and issue ratings on Ericsson (Telefonaktiebolaget LM Ericsson) to BBB- from BBB.

The outlook is negative.

The agency consequently also lowered its short-term rating on the company to A-3 from A-2 and its short-term Nordic regional scale rating to K-3 from K-2.

S&P said the downgrade reflects its downward revision of Ericsson's profitability and cash flow in 2017 and 2018 following SEK 7 billion to SEK 9 billion provisions relating to a few large customer projects, and additional restructuring charges in 2017 that offset lower costs in coming years. The agency estimates a material impact on profitability and cash flow in 2017 and 2018, recognizing that the cash impact from these charges and provisions is likely to be split over some years.

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