Level 3’s bond ratings are cut
- Share via
Ratings on some bonds for telephone network operator Level 3 Communications Inc. were cut to “default” by Standard & Poor’s as the money-losing company struggles to generate enough cash to pay debts.
The corporate credit rating for the company was reduced to “selective default” from “CC,” S&P; analyst Susan Madison said. S&P; also lowered its rating for Level 3’s convertible notes due in 2010 to “default.”
The company’s cash flow is dwindling as the recession prompts customers to put off phone-service expansions. Level 3 had $587 million on hand at the end of the third quarter and plans to use some of that cash to pay off its $344 million in debt due next year.
Calling the S&P; ratings only temporary, the Broomfield, Colo., company said: “Reinstatement of our overall credit rating is widely anticipated in the short term.”
Level 3 shares fell 3 cents to 65 cents.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
