Update:
Fitch follows Moody and upgrades Nokia’s credit rating to ‘BB’ from ‘BB-‘. They project a stable outlook for Nokia.
Fitch Ratings has upgraded Nokia Corporation’s (Nokia) Long term Issuer Default Rating (IDR) and senior unsecured ratings to ‘BB’ from ‘BB-‘ and removed them from Rating Watch Positive. The Outlook is Stable. The rating actions follow the closing of the Devices & Services (handsets) disposal and announcement of the company’s plans for disposal proceeds and ongoing capital structure.
Credit rating agency Moody has upgraded Nokia’s credit rating to Ba2 from B1, post the completion of the sale of substantially all of its Devices & Services business to Microsoft. Earlier Nokia’s credit rating took a hit when it was losing money on Devices business and most of credit agencies have downgraded it to Junk category.
This is what Moody has to say about this upgrade,
“We are upgrading Nokia’s ratings because Nokia announced that it will remain focused on its existing businesses and reduce gross debt, thus positively resolving the uncertainties reflected in the previous developing outlook on the rating” says Roberto Pozzi, a Moody’s Vice President — Senior Analyst and lead analyst for Nokia. “The upgrade also reflects our view that the performance of the company’s core Networks business will stabilise in the next 12-18 months, despite still intense competition across the communication equipment industry, and that its leverage will improve to around 2x on a Moody’s-adjusted basis over the same period, as the company executes its capital structure optimisation programme. Moody’s also expects that Nokia’s liquidity will remain solid upon completion of the plan.”
Nokia has also acknowledged this upgrade,
“Nokia is pleased to note Moody’s positive reaction towards our recent announcements. We believe we have taken the first steps towards our long term target of becoming an investment grade company”, said Timo Ihamuotila, Executive Vice President and Group Chief Financial Officer, Nokia.
Investors would expect this to be the first in the series of upgrades expected from credit rating agencies for new Nokia.
