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Moody's cuts TeliaSonera rating following sluggish revenue performance [The Swedish Wire, Stockholm](Swedish Wire, The Via Acquire Media NewsEdge) Oct. 22--Moody's Investors Service on Wednesday cut rating for TeliaSonera after the Swedish telecom operator saw another quarter of sluggish revenue performance, largely on the back of lower equipment sales in Europe. The rating firm changed to negative from stable. "Changing the outlook on TeliaSonera's ratings to negative reflects our expectation that the company will incur negative free cash flow over the next couple of years, as a result of its strategic decision to fund a major capex initiative while maintaining a stable dividend. While the company plans to fund these investments from existing cash, its net debt position will deteriorate, potentially putting further pressure on already weak credit metrics for the A3 rating category, if underlying business conditions do not improve," says Ivan Palacios, a Moody's Vice President -- Senior Credit Officer and lead analyst for TeliaSonera. Revenue for the telecom company fell 2% in the quarter compared with a year ago to 25.46 billion Swedish kronor ($3.56 billion), Wall Street Journal said October 17. The operator's European business saw sales falling 8%, largely as a result of lower equipment sales, albeit the unit's profitability improved. Moody's Investors Service has changed to negative from stable the outlook on the A3 senior unsecured rating and provisional (P)A3 MTN ratings of TeliaSonera AB. Concurrently, Moody's has affirmed these ratings as well as the Prime-2 (P-2) short-term rating. ___ (c)2014 The Swedish Wire (Stockholm, Sweden) Visit The Swedish Wire (Stockholm, Sweden) at www.swedishwire.com Distributed by MCT Information Services |