Nextel Communications Inc, the Rutherford, New Jersey digital mobile radio services operator, has had the all-clear on its ratings from Moody’s Investors Service Inc, which says it is maintaining its stable outlook on Nextel’s B3-rated $700m issue of 9.75% senior redeemable discount notes due 2004, and on the B3-rated $300m issue of 11.5% senior redeemable […]
Nextel Communications Inc, the Rutherford, New Jersey digital mobile radio services operator, has had the all-clear on its ratings from Moody’s Investors Service Inc, which says it is maintaining its stable outlook on Nextel’s B3-rated $700m issue of 9.75% senior redeemable discount notes due 2004, and on the B3-rated $300m issue of 11.5% senior redeemable discount notes due 2003, all despite the sizeable losses reported by the company. About $1,000m in long term debt is affected all told. Moody’s notes that the losses were expected and reflect the early development stage of Nextel’s expansion of its digital mobile network. Moody’s also takes comfort from the strong strategic partners with large equity stakes in the company, which include Motorola Inc, Northern Telecom Ltd, Comcast Corp, and MCI Communications Inc. Nevertheless, Moody’s says it continues to recognise the inherent risk of the company’s development plan in the intensely competitive personal telecommunications market and the project finance nature of the issue.
