WorldCom Debt Ratings Lowered
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JACKSON, Miss. (AP) _ Moody’s Investors Service and Fitch Ratings lowered debt ratings for WorldCom Inc. Thursday, a day after the telecommunications giant said it would defer interest payments on some preferred securities.
Fitch Ratings downgraded the unsecured long-term debt ratings for WorldCom to B from BB. The rating on its preferred securities has been downgraded to CCC+ from B+ and the quarterly income preferred securities have been lowered to C from B+.
Fitch Rating also downgraded the ratings for Clinton-based WorldCom’s subsidiaries.
Moody’s Investors Service made similar moves on Thursday.
``While the company has adequate cash to make the payment, the deferral reflects a more aggressive management of the company’s cash resources and a heightened need to address even modest cash outflows,″ Moody’s Investors Service said in a release.
WorldCom is dealing with concerns about its ability to repay $30 billion in debt and a Securities and Exchange Commission investigation into lending and accounting practices.
Company officials said WorldCom has enough cash on hand to pay its debts through 2003.
The company said it will defer interest payments on some preferred securities of its MCI Group unit so that it can conserve cash amid negotiations with banks to secure a $5 billion credit line.
WorldCom stock, which has lost some 90 percent of its value this year, fell 15 cents, or 9.87 percent, to close Thursday at $1.37 in trading on the Nasdaq Stock Market.
Shares of MCI Group, created last year to track WorldCom’s long distance and other consumer services, fell 22 cents, or 8.3 percent, to close at $2.43, also on the Nasdaq.
Moody’s and Fitch slashed WorldCom’s bond ratings to junk status last month.
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