S&P Joins Fitch in Downgrade of Nokia's Bond Credit to "Junk"
April 27, 2012 12:01 PM
comment(s) - last by
Rating downgrade isn't always fatal -- Ford only escaped "junk" status this week; MSFT only AAA tech comp.
Struggling Finnish phonemaker Nokia Oyj.'s (
) recovery bid was dealt a blow on Friday when top financial agency Standard & Poor's (S&P)
[press release] the company's bonds to a notch into "junk" status.
The S&P rated Nokia's senior unsecured notes at BB+ and rated the company's liquidity at B. In the bonds world anything below BBB/Baa ratings are considered "junk" -- higher risk investments.
Some countries have seen their credit rated as "junk", including Portugal (BB), Indonesia (BB), and Vietnam (BB). The U.S. recent lost its coveted triple-A credit rating, being downloaded to AA+, a notch from the top [
]. Many other nations including America's former imperial owner, the United Kingdom and its northern neighbor Canada still enjoy "AAA" credit.
[Image Source: Wikimedia Commons]
Fitch also recently
downgraded Nokia's bonds
to junk status.
A junk credit rating is a worrying sign for investors, but not necessarily a death sentence. For example, over the last decade Ford Motor Comp. (
) long languished in "junk" status, and only escaped the dubious distinction this week with
[press release] by Fitch to "BBB-" status, a notch above junk.
Nokia issued a
, citing its cash war chest as one instrument to help it weather the storm:
Espoo, Finland - Timo Ihamuotila, Nokia's Executive Vice President and CFO, comments on today's rating announcement from Standard & Poor's:
"As we have detailed in recent announcements, Nokia is in the middle of a transformation program which encompasses every aspect of our business. We are implementing a decisive action plan to position our company for future growth and success. The main focus of these actions is on lowering the company's costs, improving cash flow and maintaining a strong financial position, while bringing attractive new products to market."
Nokia's financial position remains strong. As of March 31, 2012, Nokia had gross cash balances of EUR 9.8 billion, and a net cash position of EUR 4.9 billion.
Nokia will surely look to do the same as it tries to push through the
painful Windows Phone transition
. But the credit downgrades give its critics ammo to use against it, should it slip too far during that process.
An ironic note:
Microsoft Corp. (
partner and Windows Phone BFF
is the only tech company to enjoy a perfect triple-A credit rating, at present [
]. Why does the
world's most valuable company
, Apple, Inc. (
) not have a triple-A rating? Simple, it
never issues bond debt
This article is over a month old, voting and posting comments is disabled
4/28/2012 3:28:53 AM
I actually like the older nokia phones.
They have big buttons and simple/easy interfaces. Great for guys with big hands like me.
RE: poor nokia
4/28/2012 1:09:52 PM
add 5+ days of battery life, never crash/need reboot, and basically never fail.
if all you need to do is dial and text, 5-10 year old Nokia's are still a great option until their older spectrum isn't used. if you want data on those old devices, EDGE is going to be phased out within the next year on many carriers to use as LTE bandwidth.
"This week I got an iPhone. This weekend I got four chargers so I can keep it charged everywhere I go and a land line so I can actually make phone calls." -- Facebook CEO Mark Zuckerberg
Nokia Credit Rating Cut to "Junk" Status by Fitch
April 24, 2012, 11:44 AM
Update: Apple Announces Dividend for Q4, $10B Share Repurchase for 2013; Closes Above $600
March 19, 2012, 5:12 PM
Nokia Paints Bleak Picture of 2011's Painful Windows Phone Transition
March 9, 2012, 1:16 PM
Apple CEO Tim Cook: We Have More Money Than We Need
February 24, 2012, 8:13 AM
It's Official: Nokia to Enter "Strategic Partnership" with Microsoft, Adopt Windows Phone 7
February 11, 2011, 6:01 AM
iLate: CEO Tim Cook Says Apple Watch Will Ship in April
January 28, 2015, 3:03 PM
Amazon's Fire Sale on Fire Phone Steps up in UK w/ 1-Day Sale @ $150 Unlocked
January 28, 2015, 11:53 AM
Apple Sees Record Profit of $18 Billion, Sells 74.5 Million iPhones in Q1 FY2015
January 27, 2015, 6:01 PM
Apple Might Miss High-End of Analyst Estimates, Microsoft Earnings Hint
January 27, 2015, 3:14 PM
Microsoft Smartphone Sales Up 28 Percent as Lumia Budget Models Gain Ground
January 27, 2015, 8:30 AM
Quick Note: Special 20th Anniversary PlayStation 4 Raises $128,000 for Charity
January 26, 2015, 4:14 PM
Most Popular Articles
Google Fixes Homophobic "Bug" in its Translator
January 27, 2015, 2:31 PM
Ancient Aliens? 11.2 Billion Year Old Solar System Discovered
January 29, 2015, 12:09 PM
Under the Hood: How DirectX 11.3 and 12 Will Supercharge Windows 10 Gaming
January 23, 2015, 12:34 PM
Dual-Motor Tesla Model S P85D's "Insane Mode" Shocks Passengers
January 28, 2015, 11:18 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information