NEW YORK—Moody’s Investor Services cut its long-term credit rating for Qwest Communications International Inc. citing concerns about the telecommunications company’s liquidity position, cash drain at its long-distance operating subsidiary, slowing growth in its local telephone service, continued high debt levels, ongoing Securities and Exchange Commission investigation and general corporate governance.
Qwest said it was disappointed by the downgrades, but believes they will not have a substantial impact on its operations.
“Although we are disappointed with the actions taken by Moody’s and S&P, these firms traditionally tend to follow one another on ratings adjustments,” said Robin Szeliga, executive vice president and chief financial officer at Qwest. “We are concerned that [the] adjustment by Moody’s, as with S&P, is not based on any new information.”
Qwest was also hit with the news that Dutch telecommunications provider KPNQwest plans to file for bankruptcy today after talks to secure short-term financing failed. The company said it is still in negotiations to sell part of the company and that a number of KPNQwest’s subsidiaries across Europe would also file for bankruptcy protection.
