Ericsson responds to BB+ rating by Standard & Poor's.Business & Telecommunications Editors STOCKHOLM, Sweden--(BUSINESS WIRE)--Aug. 1, 2002 Standard & Poor's today announced that it has downgraded the long-term credit rating of Ericsson (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ERICY) from BBB- to BB+, maintaining their CreditWatch status pending completion of the rights offering. Ericsson's ratings from Standard & Poor's and Moody's Investor Services are now aligned. The downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. has no effect on Ericsson's rights offering. "This downgrade has no effect on our rights offering. As we have said earlier, the underwriting agreements Underwriting agreement The contract between a corporation issuing new publicly offered securities and the managing underwriter as agent for the underwriting group. Compare to agreement among underwriters. with our banks remain firm and so does the commitment from a group of our major shareholders." Says Michael Treschow Michael Treschow (born April 22, 1943, Helsingborg, Skåne län) is a Swedish businessman. As chairman of the board of both Ericsson and the Confederation of Swedish Enterprise, Treschow is one of the most influential people in Swedish business today. , Chairman of the Board, Ericsson. As stated on July 26, the underwriting agreements are unchanged even if the company's credit rating were to drop to BB by Standard & Poor's or Ba3 by Moody's Investor Services. "We consider it unlikely that our rating should fall two more steps before completion of the rights offering, and we are confident that the rights offering will be completed as planned," says Michael Treschow. Like Moody's, Standard & Poor's has stated their expectation that, given Ericsson's current credit profile, the new rating will be affirmed once the rights offering has been completed. Credit agencies have been systematically lowering their ratings for the communication equipment industry for some time. Ericsson views Standard & Poor's decision as related to their view of the industry in general. The incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. financial impact of Standard & Poor's decision amounts to an increase in financing costs of approximately SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 55 million annually. Ericsson is shaping the future of Mobile and Broadband Internet See broadband. communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. |
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