Debt rating hits new low despite EDS pleas of a "sound financial footing"...
Published: 19 July 2004 08:25 GMT
Credit rating firm Moody's Investors Service has cut its rating on Electronic Data Systems debt to a "junk" level.
The downgrade represented the latest setback for the struggling tech services company.
Moody's said in a statement: "The downgrade reflects EDS' ongoing business risk, the modest pace of improvement associated with its turnaround program, and low levels of free cash flow to the company's $4.4bn debt level."
Moody's lowered its rating of EDS senior unsecured notes from "Baa3", its lowest "investment grade" rating, by one notch to "Ba1".
EDS issued a response saying it disagreed with the downgrade, given the company's "progress and sound financial footing".
EDS also said it expects to meet its guidance for the second quarter, and has no current plans to proceed with an equity offering. The company was evaluating raising more than $1bn of additional capital.
Staff, News.com
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