Moody's Affirms Debt Ratings Of Telecom Corp Of New Zealand

Moody's Investors Service has affirmed the A2 long-term rating and P-1 short-term rating of Telecom Corporation of New Zealand Limited following its announcement of full-year results for 2007, and which were in line with its expectations.

"The rating affirmation considers the continued strength of TCNZ's business model, and the return of its financial metrics to levels more consistent with a single-A rating" says Ian Lewis, a Moody's VP/Senior Analyst and lead analyst for the Australasian telecommunications sector.

"The company, however, remains exposed to regulatory challenges as the government continues to encourage competition," says Lewis, referring to recent draft determinations on Local Loop Unbundling pricing and ongoing discussions over operational separation.

"Moody's will continue to monitor developments in the regulatory environment and will assess the potential credit impact of any separation plan when more clarity emerges on the form the restructuring will assume," says Lewis.

The stable outlook acknowledges TCNZ's willingness and ability to sustain its current profile, which supports its target rating -- a level where it is now in turn positioned -- and its healthy liquidity position due to the proceeds from the sale of the Yellow Pages Group.

Telecom Corporation of New Zealand Limited, headquartered in Wellington, New Zealand, provides telecommunications services in New Zealand and Australia."

Posted to the site on 6th August 2007