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- Release Date: 21/01/14 16:48
- Summary: CREDIT: CNU: Moody's downgrades Chorus from Baa2 to Baa3
- Price Sensitive: No
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CNU
21/01/2014 14:48
CREDIT
REL: 1448 HRS Chorus Limited (NS)
CREDIT: CNU: Moody's downgrades Chorus from Baa2 to Baa3
Moody's downgrades Chorus from Baa2 to Baa3
Moody's Investors Service has today issued an announcement downgrading
Chorus' issuer and unsecured credit rating from Baa2 to Baa3, with negative
outlook.
Moody's had previously placed Chorus on review for possible downgrade,
following the release of the Commerce Commission's copper broadband (UBA)
pricing decision in November.
Chorus chief financial officer Andrew Carroll said the downgrade was
disappointing given that the Commission's pricing decision does not come into
effect until December 2014 and the range of initiatives Chorus continues to
explore to mitigate the financial impact of the Commission's final UBA
decision. Moody's decision will result in an immediate but modest increase
in the cost of Chorus' borrowing.
"As we explained in December, we are assessing all options available to us,
including cutting all discretionary activity, re-pricing commercial services,
generally managing for cash and assessing capital management options. We
have also commenced constructive discussions with Crown Fibre Holdings. While
this work continues, we cannot finalise our medium term strategy or capital
management settings.
"In addition, Chorus has appealed the Commission's initial UBA decision to
the High Court and requested that the Commission undertake economic cost
modelling of both UBA and UCLL pricing, which differs from its original
benchmarking approach, as allowed for by the legislation," he said.
Chorus is currently rated BBB, creditwatch negative, by Standard & Poor's.
A copy of the Moody's announcement is attached.
ENDS
For further information:
Ian Bonnar
Corporate Affairs Manager
Phone: +64 9 358 6061
Mobile: +64 (27) 215 7564
Email: [email protected]
Brett Jackson
Investor Relations Manager
Phone: +64 4 498 9271
Mobile: +64 (27) 488 7808
Email: [email protected]
End CA:00246258 For:CNU Type:CREDIT Time:2014-01-21 14:48:23
