Moody’s downgrades Ericsson

Moody's Investors Service said it downgraded Telefonaktiebolaget LM Ericsson’s corporate family rating to Ba2 from Ba1 and changed the outlook to negative from stable.

Concurrently, the agency downgraded Ericsson's probability of default rating to Ba2-PD from Ba1-PD, senior unsecured long-term ratings to Ba2 from Ba1 and senior unsecured medium-term note program rating to provisional Ba2 from provisional Ba1.

"The downgrade to Ba2 with a negative outlook reflects our expectation that Ericsson's operating profit and free cash flow in 2017 and 2018 will continue to be negative, due to rising restructuring charges and provisions," Alejandro Nunez, Moody's vice president, senior analyst and lead analyst for Ericsson, said in a news release.

"We believe that the turnaround of Ericsson's business and operating performance will take longer than previously anticipated with no expectation of a meaningful recovery until late 2018 at the earliest."

© 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.