Nokia gets credit rating downgraded two notches by Moody's; outlook still negative

Nokia gets credit rating downgraded two notches by Moody's; outlook still negative
According to Reuters, credit ratings agency Moody's has downgraded the ratings of Finnish cell phone manufacturer Nokia by two notches on Wednesday, theoretically making it more expensive for the company to conduct business. Last month, two other credit agencies-S&P and Fitch-also downgraded Nokia's credit ratings. The lower a company's ratings, the more interest it must pay when issuing bonds or borrowing money from the bank.

Moody's action comes after Nokia reported a loss last week for its latest quarter. And while the company is pinning its hopes on a series of new handsets powered by the Windows Phone 7 OS, it is planning on soon offering the MeeGo powered Nokia N9, a touchscreen device that has no hardware buttons on the front of the unit. Despite receiving some positive feedback when it introduced the N9, as we reported Nokia insists that its future is with Microsoft's mobile OS.

While announcing the downgrade, Moody's did say that Nokia has enough liquidity and cash to survive while it makes the transition from offering Symbian powered models to producing its new Windows Phone 7 flavored phones. After the downgrade, Moody's ranks Nokia's debt at Baa2, which is just 2 rankings above "Junk" status. Many mutual funds and banks are not allowed to hold debt rated below Baa. Moody's still says that Nokia's outlook is negative, even after the ratings cut, which means that the next action by Moody's will most likely be another cut in Nokia's credit ratings.

source: Reuters

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18 Comments

1. Pings

Posts: 304; Member since: Dec 19, 2008

They have nowhere to go but down with Windows Phone 7...

5. snowgator

Posts: 3614; Member since: Jan 19, 2011

Nope- nowhere but up, in my humble, unimportant opinion. I have giving my thought on this in other posts, so I will shorten it: Nokia knew where they were headed in 2011 while moving to W7, they were prepared ( quote- "While announcing the downgrade, Moody's did say that Nokia has enough liquidity and cash to survive while it makes the transition from offering Symbian powered models to producing its new Windows Phone 7 flavored phones.), and without having to pour tons of money into Symbian development and upkeep they stand to become much more profitable.

2. remyrz

Posts: 205; Member since: Oct 28, 2010

c'mon nokia.. get fast with those handsets!

3. Photographer unregistered

Why is it that PA is always posting bad news about Nokia even news that are not posted on other mayor websites, I know this is just news but seriously, I'm thinking that PA enjoys the bad news about Nokia. The hate is starting to get pretty obvious.

7. snowgator

Posts: 3614; Member since: Jan 19, 2011

They have been fair. They have given a lot of airtime to the upcoming Sea Ray. Just from a company side, Nokia's transition has been very, very painful since late last year. Besides- if it bleeds, it leads. True for all news.

9. nghtwng68

Posts: 108; Member since: Nov 26, 2009

Well spoken. It seems very obvious that the mass wants Nokia to fail in every way possible. If Motorola can rise from the ashes, I see why Nokia can't do the same. Prove the naysayers wrong and GOOD LUCK NOKIA!

4. ryq unregistered

when it rain it pours! and the fall continue for nokia. windows is nokia's last chance.

6. snowgator

Posts: 3614; Member since: Jan 19, 2011

I hope they do not push out unprepared handsets just to soften this blow. It is so important their first Windows powered, Mango flavored devices be well-recieved hits. Also wish they had decided to keep a line of MeeGo devices supported. That would have helped in the transition, I think. That N9 had people excited.

8. Photographer unregistered

I remember that Motorola was even worse than this and they recovered and even became one of the most important Android handset manufacturers, so Nokia still has many chances to get back.

10. The_Miz

Posts: 1496; Member since: Apr 06, 2011

Goodbye Nokia, too bad I care nothing of you and your crappy phones.

11. wtf unregistered

Goodbye The_Miz, too bad no one here cares about you or your crappy posts.

19. The_Miz

Posts: 1496; Member since: Apr 06, 2011

my gf does ;)

12. snowgator

Posts: 3614; Member since: Jan 19, 2011

Hey!! Cool!! A Miz sighting!! Hope it is something negative!! Whew. It was. Worried it might be something constructive.

18. The_Miz

Posts: 1496; Member since: Apr 06, 2011

everything I say is constructive. Just that I tend to hurt feelings whenever I talk.

13. JS15278 unregistered

say what ever you want until holidays all of you who want Nokia to fail you wont believe in your eyes you will make ques for a N9 or wp Nokia makes the best smartPHONES and PHONES (because first is a phone and then all the others) i have an N8 from december 2010 and i wont change it for any android or i phone. I saw the teardown of galaxy s II in fcc and i am sorry but it was made to fast and i saw the photow of N8 which in quality was out of space so stay you will never have the sence of a quality product

14. JS15278 unregistered

did i forget Moody's, S&P and Fitch i think they are American Companys and guess witch company isn't American ''NOKIA" and witch company has not American os until now and makes her own os (Symbian, Meego) lucky i don't think so. Yes i am european

15. Kov unregistered

I am european too! :) Go Nokia GO >>

16. nuadar unregistered

I'm europian too! :) but hey I really dont care about Nokia..switched to other companies long time ago(4 year??)..personal preferences in terms of design,performance and interface of OS and really bad components... But they have to succeed with WP7 or they'll end in totall sh*t

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