Moody's: Pacnet to negative

Moody's Investors Service said it revised to negative from stable the outlook for Pacnet Ltd.'s B1 corporate family and senior secured debt ratings.

The change in outlook reflects Pacnet's worse-than-expected operating performance for the second quarter of 2011, Moody's said, and an expectation that it will operate at a higher-than- expected level of leverage over the intermediate term.

The outlook also reflects the chronic decline in pricing and intense competition across its IP-based business, the agency said, and resultant lower cash flow generation.

The agency said it expects these challenging fundamentals to persist over the next 6 to 12 months.

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