Moody's: Split 'negative' for Telecom outlook

International credit rating bureau Moody's has today adjusted Telecom's outlook for long and short-term ratings to negative, down from its previous rating of stable.

 In a statement, Moody's said the lowered outlook was prompted by Telecom's announcement that it will 'demerger' Chorus in order to meet the terms of the government's UFB contract.

Moody's analyst Ian Lewis said the change "reflects the earnings dilution and narrowing of business mix that will arise from the proposed separation of Chorus and therefore the loss [of Telecom's] legacy copper network." Lewis said the rating also took into account the uncertainty associated with the post-separation capital structure and financial policy.