Fitch Slashes Nokia's Rating

Fitch has cut its rating for bonds issued by Nokia to one notch above junk grade and said the outlook for the rating was negative as the handset maker rapidly loses market share.

Nokia warned last week that mobile phone sales in the second quarter would be substantially below a previous forecast and abandoned its full-year outlook, blaming difficult conditions in China and Europe.

Fitch on Tuesday cut Nokia's Long-term Issuer Default Rating (IDR) and senior unsecured rating to 'BBB-' from 'BBB+'.

Nokia's customers are fleeing faster than expected as it is in the midst of changing smartphone software to Microsoft's Windows Phone from its own Symbian system.

"The pace of deterioration has picked-up since Nokia decided to switch to an alternative operating system, and it appears consumers are deserting these legacy handsets for cheaper Android versions or high-end Android or Apple smartphones," Fitch analyst Stuart Reid said in a statement.

Shares in Nokia were down 0.9 percent at 4.51 euros by 1129 GMT.