Moody's cuts Vestel notes to B2

Moody's Investors Service said it downgraded the ratings of Vestel Elektronik Sanayi ve Ticaret AS. Its corporate family rating and probability of default rating was downgraded to B2 from B1. Its $225 million 8 ¾ guaranteed notes due 2012 also were cut to B2 from B1.

The outlook remains negative.

This action follows a review of Vestel's results for the first nine months of 2007 and consideration of operating performance trends looking prospectively into 2008, Moody's said.

Moody's said it is concerned about the challenges faced by the company in improving its operational performance and restoring profitability, particularly in its TV business. Vestel's financial risk profile and degree of financial flexibility are more in line with a weaker B2 rating, the agency said.

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