Frankfurt am Main, December 04, 2012 -- Moody's Investors Service has today downgraded Alcatel-Lucent's corporate family rating (CFR) and probability of default rating (PDR) to B3 from B2. Concurrently, Moody's has downgraded Alcatel-Lucent's senior debt ratings to Caa1, with a loss given default assessment of 5 (LGD5, 75%), from B3, LGD5 (75%). In addition, the rating agency has downgraded to Caa2, LGD5 (79%), from Caa1, LGD5 (77%), the ratings on two convertible bonds issued by Lucent Technologies, Inc., before its 2006 merger with Alcatel, and guaranteed by Alcatel-Lucent on a subordinated basis. The outlook on all ratings remains negative.
"Today's one-notch downgrade of Alcatel-Lucent's CFR was driven by our expectation that in 2012 the company will not be able to cut its cash burn materially below the 2011 level of approximately EUR620 million as adjusted by Moody's," says Roberto Pozzi, a Moody's Vice President -- Senior Analyst and lead analyst for Alcatel-Lucent. Alcatel-Lucent's previous B2 rating had been partly based on Moody's assumption that the company's cash burn would be no more than EUR300 million for 2012, as adjusted by Moody's. "This inability to reduce cash burn reflects (1) a contraction in Alcatel-Lucent's revenues of around 7% year-on-year in the first nine months of 2012, and (2) continued weakness in the company's gross profit margins, which necessitates renewed restructuring efforts," adds Mr. Pozzi.
Moody's also considers that significant uncertainty remains about Alcatel-Lucent's ability to significantly reduce its free cash outflows in 2013 and move towards break-even thereafter. The rating agency notes that the company has been consuming cash from operations since the 2006 merger between Alcatel and Lucent Technologies, Inc. and that its cash burn increased to EUR885 million in the 12 months to September 2012 from approximately EUR620 million as of FY2011 on a Moody's adjusted basis.
Usually Alcatel-Lucent's cash flow is back-ended, so that the only cash-generative quarter of any one year is Q4. In 2012, Moody's expects that Alcatel-Lucent's fourth-quarter cash flows will only partly offset the company's cash consumption in the third quarter (EUR360 million as reported by the company) and that the company's cash consumption during the second half of 2012 will remain negative. Moreover, Alcatel-Lucent has implemented new cost-saving measures, which are aimed at generating additional cost savings of EUR750 million in 2013. However, although these may eventually strengthen the company's operating cash flows, Moody's cautions that its past efforts have been absorbed by deteriorating macro environment and price pressure in the market, which continues unabated given similar cost-cutting measures by competitors. Also, despite increasing communication traffic flows, there is currently no visibility with regard to a recovery in demand for telecommunication equipment. Because of this and telecom operators' currently restrained investment strategies (except for some operators in the Americas), Moody's believes that revenue contraction in the industry could continue for several quarters.
Alcatel-Lucent's liquidity profile is good based on the availability of around EUR4.7 billion in cash and marketable securities at end of September 2012. After consideration of cash needs for operations (typically estimated by Moody's at 3% of sales, or around EUR500 million) and about EUR1.2 billion cash and marketable securities held in countries subject to exchange controls, the liquidity well covers upcoming debt maturities of around EUR860 million in the next 12 months to June 2013 including the US$765 million (EUR619 million as reported in the company's third-quarter 2012 results) 2.875% Series B convertible bonds due in 2025, with a 15 June 2013 put option and leaves headroom for potential cash consumption in operations. The EUR837 million revolving credit facility matures in April 2013 and is currently undrawn. The facility has a financial leverage covenant related to cash flow/net debt with reasonable headroom as a result of the net cash position currently reported.
Alcatel-Lucent's next large debt maturities are its 6.375% bonds due in April 2014, with EUR462 million currently outstanding and the EUR1.0 billion 5% Oceane due in January 2015. Given the scale of Alcatel-Lucent's cash consumption and the company's upcoming debt maturities, Moody's considers that cash and short-term securities balances are not as comfortable as they appear at first glance. Alcatel-Lucent's liquidity could be bolstered by increased royalty collections, such as those resulting from the company's agreement with RPX or from own efforts, or proceeds from potential business exits, but overall its options for further asset monetisation appear to be decreasing.
The negative outlook on Alcatel-Lucent's rating reflects the company's ongoing cash burn relative to its substantial, but finite, liquidity. With an outlook for declining sales in 2012, Moody's considers that Alcatel-Lucent's management will be challenged to cut costs fast enough to curb cash consumption and to realise opportunities for asset monetisation.
WHAT COULD CHANGE THE RATINGS DOWN/UP
Negative pressure on the B3 rating would increase if (1) the company's operating margin, as adjusted by Alcatel-Lucent, fails to trend towards the mid-single-digits in percentage terms in 2013, with further tangible improvements thereafter; (2) Alcatel-Lucent fails to maintain its negative free cash flow below EUR500 million on a last 12 month basis throughout 2013, as adjusted by Moody's; (3) the company's debt/EBITDA fails to improve towards 6.0x as adjusted by Moody's; or (4) the company fails to improve its liquidity position through asset disposals and/or refinancing well ahead of its debt maturities in 2013-14. Rating pressure could ease and the outlook on the rating stabilise if all the above conditions are met, with particular regard to an improvement in free cash flow generation.
Although currently unlikely, upward rating pressure would require Alcatel-Lucent to (1) generate significant positive free cash flow on a last-12-months basis, as adjusted by Moody's; (2) sustain sales growth; and (3) achieve an operating margin, as adjusted by Alcatel-Lucent, in the mid-single digits in percentage terms.
The principal methodology used in rating Alcatel-Lucent was Global Communications Equipment Industry rating methodology published in June 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the US, Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.
Headquartered in Paris, France, Alcatel-Lucent is one of the world leaders in providing advanced solutions for telecommunications systems and equipment to service providers, enterprises and governments. The company reported sales of EUR6.8 billion in H1 2012.
For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.
Information sources used to prepare the rating are the following : parties involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.
Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.
Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entity or its related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.
Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.
Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.
Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.
The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Roberto Pozzi Vice President - Senior Analyst Corporate Finance Group Moody'sDeutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Matthias Hellstern Managing Director Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Deutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.
All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.
MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."
Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.
Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.
This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.
Nachrichten zu Alcatel-Lucent
- vom Unternehmen
- Peer Group
Relevant: Nachrichten von ausgesuchten Quellen, die sich im Speziellen mit diesem Unternehmen befassen
Alle: Alle Nachrichten, die dieses Unternehmen betreffen. Z.B. auch Marktberichte die außerdem auch andere Unternehmen betreffen
vom Unternehmen: Nachrichten und Adhoc-Meldungen, die vom Unternehmen selbst veröffentlicht werden
Peer Group: Nachrichten von Unternehmen, die zur Peer Group gehören
Analysen zu Alcatel-Lucent
|09.01.2014||Alcatel-Lucent kaufen||Morgan Stanley|
|09.01.2014||Alcatel-Lucent halten||Deutsche Bank AG|
|07.01.2014||Alcatel-Lucent kaufen||Barclays Capital|
|04.11.2013||Alcatel-Lucent kaufen||UBS AG|
|09.01.2014||Alcatel-Lucent kaufen||Morgan Stanley|
|07.01.2014||Alcatel-Lucent kaufen||Barclays Capital|
|04.11.2013||Alcatel-Lucent kaufen||UBS AG|
|27.08.2013||Alcatel-Lucent kaufen||Deutsche Bank AG|
|10.07.2013||Alcatel-Lucent kaufen||Deutsche Bank AG|
|09.01.2014||Alcatel-Lucent halten||Deutsche Bank AG|
|11.09.2013||Alcatel-Lucent halten||Joh. Berenberg, Gossler & Co. KG (Berenberg Bank)|
|30.08.2013||Alcatel-Lucent halten||Citigroup Corp.|
|05.08.2013||Alcatel-Lucent halten||Citigroup Corp.|
|31.07.2013||Alcatel-Lucent halten||Credit Suisse Group|
|31.07.2013||Alcatel-Lucent verkaufen||Exane-BNP Paribas SA|
|21.06.2013||Alcatel-Lucent verkaufen||Société Générale Group S.A. (SG)|
|20.06.2013||Alcatel-Lucent verkaufen||Exane-BNP Paribas SA|
|12.06.2013||Alcatel-Lucent verkaufen||UBS AG|
Alle: Alle Empfehlungen
Buy: Kaufempfehlungen wie z.B. "kaufen" oder "buy"
Hold: Halten-Empfehlungen wie z.B. "halten" oder "neutral"
Sell: Verkaufsempfehlungn wie z.B. "verkaufen" oder "reduce"
Mehr zur Alcatel-Lucent-Aktie
Heute im Fokus
TLG Immobilien lockt weiter mit Aussicht auf hohe Dividende. Lufthansa erhält Auftrieb durch billiges Öl und Analystenlob. Ryanair-Aktionäre machen Weg für Boeing-Großauftrag frei. Analytik Jena mit Gewinnwarnung. Rubel fällt auf Rekordtief. Merck will bei Consumer Health Umsatzmilliarde knacken. Twitter-Finanzchef vertwittert sich erneut.
Diese DAX-Aktien bringen die höchste Rendite
20 Dinge, die man für 561 Milliarden Euro kaufen könnte
Diese Firmen investieren am meisten in Forschung und Entwicklung