Nokia says Moody's rating downgrade a non-issue, net cash actually higher than a year ago

Nokia says Moody's rating downgrade a non-issue, net cash actually higher than a year ago
Nokia issued a press release commenting on its recent Moody's credit rating downgrades (today Moody's slashed from Ba3 to Ba1), which followed other agencies slashing its bonds a few notches in the "B" levels. Some were quick to point out that lower credit ratings are bad for the borrowing costs, since pension and other funds are only allowed to buy "A"-rated securities, but that's precisely why for junk bonds where the stock is trading in sub-$2 levels, those downgrades don't matter much anyway.

Nokia already issued a rebuttal to Moody's last downgrade, but now with the quarterly results out last week, and not as bad as expected, the Finns add some more arguments why its junk-to-junk rating downgrades are a non-issue at this point:

It's good that the company has cash, instead of relying on debt to finance its transition to Windows Phone 8 with its eventual high-margin handsets, but the cost controls are even more important if Nokia wants to maintain a zero sum game until it has fully transitioned, and the company seems to deliver by slashing unneeded jobs and outsourcing production. These measures will be needed at least until some time next year, when it will become clear what acceptance Nokia Windows Phone 8 devices have received.

source: Nokia



1. digitalw

Posts: 79; Member since: Dec 20, 2011

NOKIA is now in magical down spiral. Their products are far more advanced that "reviewers" says in theit reviews. SYMBIAN BELLE is OS that is not mached by other in terms of efficiency (just lok what Nokia N8 can do with 680mhz cpu and 256 ram, no droid or iOS product can on those Mhz behave so fluid). Lumia 800 and 900 are great products with extra low prices! About upgadde to win8. I know very few users that have their phones upgraded to their newes firmware. For normal user, the product dies usualy with the software that he bought beacuse 90% of users are using theit phones the same way the dumb phones are used! So beacuse with all that "screaming" arround that NOKIA is dead (some of my frineds asked me: "NOKIA is alive?! They didn't go bankrupt?" the press made their opoint that they are strong force in creating a buzz around a company or a product.

2. neutralguy

Posts: 1152; Member since: Apr 30, 2012


3. snowgator

Posts: 3621; Member since: Jan 19, 2011

Still believe in Nokia and WP. This isn't RIM, in fact that is why Nokia made the move to from making their own OS, to avoid becoming a company stretched too thin. 2013 can't get here fast enough for Nokia.

4. Edmund

Posts: 656; Member since: Jul 13, 2012

The steps taken by Nokia over the last year were extremely dilligent business decisions in my opinion. Not only will these changes save the company a significant amount of cash in the form of reduced operating costs, they also place Nokia in a better position to launch new products almost directly after their announcement (something they struggled with on Symbian and Meego). Make no mistake about it, Nokia has hired some top-notch consultants to bring about these changes; They're not some half-assed, willy-nilly, decisions made on the fly like RIM's

5. Samsomesh

Posts: 195; Member since: Jun 11, 2012

Nokia try to improve uer app store and symbian os.!!

6. cptbeatstix

Posts: 101; Member since: Jul 19, 2012

I would by that Nokia stock now. When Windows 8 comes out, it should jump up a lot

7. jack1059

Posts: 72; Member since: Mar 31, 2012

What else would the say? Theyre too busy re-arranging the deck chairs to notice.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit for samples and additional information.