Ratings agency reiterates Telecom negative credit watch

Separation of Chorus may result in downgrade, Standard and Poor's says

Ratings agency Standard and Poor's has released a statement saying it is continuing to place Telecom on negative credit watch, due to the pending spin-off of Chorus.

In the statement, Standard and Poor's credit analyst Paul Draffin says: "As we've said previously, we believe this demerger will weaken TCNZ's strong business risk profile

"If shareholders approve the demerger, it will likely result, all things being equal, in a lowering of the long-term rating on TCNZ by at least one notch. However, a rating outcome of 'A-' is possible for TCNZ if the group maintains an appropriately conservative capital structure and financial policies following the demerger."

The full text of the statement can be found here.

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Tags structural separationtelecomChorusstandard and poor's

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