KEY POINTS:
Telecom's credit rating downgrade from Moody's yesterday is unlikely to have much effect on the company whose funding requirements for the next couple of years are already in place, says Forsyth Barr analyst Guy Hallwright.
Moody's downgraded Telecom's senior unsecured and short term commercial paper ratings from A2/P-1 to A3/P-2 following a review begun late last year.
"The rating action reflects ongoing pressure on TCNZ and Moody's
expectation that this will continue given challenging operating conditions and as TCNZ faces the combined effects of increased competition, tighter
regulatory requirements and weak economic conditions," said Moody's senior analyst Ian Lewis.
Hallwright, said it would have a slight impact on what price Telecom could issue debt at, but it would be very small as the other major ratings agency Standard & Poor's had not downgraded the company and had not indicated any intention to do so.
Telecom shares closed up 1c at $2.50 yesterday.
