Standard & Poor’s and Moody’s downgraded Lucent’s ratings and iss...
Standard & Poor’s and Moody’s downgraded Lucent’s ratings and issued negative outlooks Mon., citing operating losses and other problems plaguing company. S&P lowered Lucent’s corporate credit rating to BBB- and reduced its other ratings as well. S&P said action…
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reflected its belief that company “will likely incur substantial operating losses over the near to intermediate term” as it implemented restructuring plans. Moody’s downgraded ratings on Lucent’s unsecured long-term debt to Baa3 from Baa1 and for commercial paper to Prime-3 from Prime-2. Moody’s said downgrades “reflect the significant operational difficulties at the company, which are partially mitigated by the material cash inflows from business divestitures” and expected benefits from restructuring plan. Moody’s said it expected Lucent’s “operating performance will remain under significant pressure for the foreseeable future.” Ratings are among lowest issued by the 2 credit rating agencies. Lehman Bros. raised its 2001 loss forecast for Lucent to 67 cents per share from earlier 50 cents. “Until we see signs that Lucent has fundamentally bottomed, we continue to recommend that investors, not to be confused with short-term traders, stay on the sidelines,” Lehman said in research report. Meanwhile, Lucent said it will be equipment and services supplier for Verizon’s planned global optical-data network. Verizon announced plans for global network to link U.S. with Europe, Asia and Latin America. First phase will link N.Y. to London, Paris, Amsterdam, Brussels, Frankfurt, Milan. Financial terms are still being worked out but companies are in last phase of negotiations, probably finalizing agreement in 2-3 months, Lucent spokeswoman said.