S&P Cuts Ericsson Debt Rating to Junk Status
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Ericsson’s debt was cut to “junk” status by Standard & Poor’s Corp., but the Swedish telecommunications equipment giant’s shares edged higher, bucking a broad market sell-off, because a danger to its critical $3.13-billion rights offering subsided.
The one-notch downgrade appeared for now to eliminate the risk that a deeper cut might force the world’s biggest wireless network maker to delay or cancel the offering. Ericsson needs cash to run its wireless equipment business and cut jobs.
While S&P; warned that another long-term credit downgrade is possible, it said it would wait until after what it termed Ericsson’s “critical” rights offering, set for September.
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