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Moody's cuts WordCom's long-term rating to Baa2
NEW YORK, April 23 (Reuters) - Moody's Investors Service on Tuesday cut its long-term credit ratings on No. 2 U.S. long-distance company WorldCom Inc. two notches, affecting $30 billion of debt, and warned it may cut the ratings again.
Moody's cut Clinton, Mississippi-based WorldCom's long-term ratings to Baa2, its second-lowest investment grade, from A3. Moody's also placed WorldCom's P-2 short-term rating on review for possible downgrade.
Moody's downgrade followed similar action on Monday from Standard & Poor's, which cut its long-term credit ratings on WorldCom to BBB from BBB-plus.
"The downgrades reflect WorldCom's revised earnings forecasts for 2002, which
were significantly below Moody's expectations," Moody's said.
Moody's said WorldCom's credit position is also weakened by high levels of operating and financial leverage. "Moody's remains concerned by the uncertain outlook for the industry and believes that further revisions to WorldCom's projected operating performance could occur before year-end as pricing pressure continues," the rating agency said.
(( Dena Aubin, U.S. Financial Markets Desk (646) 223-6325, dena.aubin@reuters.com ))
