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Friday, November 20, 2009
Moody's Cuts Sprint Nextel Rating To 'Ba2'
By Carla Mozee
MarketWatch Pulse
LOS ANGELES -- Moody's Investors Service on Friday downgraded its corporate family rating on Sprint Nextel Corp. to Ba2 from Ba1, saying the wireless-services provider's ability to stem the deterioration of its earnings is taking longer than it had originally anticipated. The agency said the company's leverage, therefore, is likely to deteriorate before stabilizing at much weaker levels than previously expected. The outlook for Sprint Nextel's ratings is negative. Moody's said earnings pressure is likely to persist until the loss of post-paid subscribers decreases more significantly. "Complicating Sprint's challenges in stabilizing the profitability of its post-paid operations is stubbornly high churn and an industry trend towards higher handset subsidies," said Moody's analyst Dennis Saputo in a prepared statement.
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