Moody's may downgrade Telcordia Technologies

Moody's Investors Service said it placed the ratings of Telcordia Technologies, Inc. on review for possible downgrade, including the company's B1 $100 million senior secured revolving credit facility due 2011, B1 $570 million senior secured term loan due 2012, B3 $300 million senior subordinated notes due 2013 and B1 corporate family rating. The review could result in a ratings decline of one or more notches.

Moody's said the review is prompted by the company's continued year-over-year declines in revenue and EBITDA and a substantial reduction in liquidity since the beginning of its fiscal year. Legacy operations systems support revenue has declined faster than expected during the first six months of the fiscal year while the ramp up in next generation software business has been slower than expected. The seasonal decline in cash of over $100 million in the first two fiscal quarters was greater than expected and of particular concern although there is the expectation of significant cash inflows from the receipt of life cycle program maintenance contract payments in the fiscal 4th quarter.

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