NEW YORK-The $410 million in outstanding subordinated convertible debt issued by Agere Systems Inc., Allentown, Pa. received a speculative-grade ratings downgrade August 30 from Moody’s Investors Service, to B3 from B2. The New York-based rating agency cited its expectations that Agere’s operating losses and cash burn will continue, despite its cost reduction efforts, due to the prolonged telecommunications industry downturn.
“The rating recognizes Agere’s breadth of technology and its solid or leading market positions in a number of areas, including integrated circuits for the hard disk drive, wireless data and computing sectors,” said Robert Konefal, managing director, and Richard Lane, senior vice president of corporate finance ratings.
“Moody’s believes that Agere’s technological and product strength, as well as its customer relationships, will provide a base off of which it should be able to generate improved revenues and profits once demand conditions improve and it has achieved the significant cost reductions that are part of its most recent restructuring efforts.”
