Moody's cuts Koninklijke to Baa3

Moody's Investors Service said it downgraded the senior unsecured rating of Koninklijke KPN NV to Baa3 from Baa2.

Concurrently, the agency downgraded KPN's short-term issuer rating to Prime-3 from Prime-2 junior subordinated regular bonds to Ba2 from Ba1, multiple seniority medium-term note program to provisional Ba1 from provisional Ba3, senior unsecured credit facility to Baa3 from Baa2 and senior unsecured regular bonds to Baa3 from Baa2.

The outlook is stable.

"Today's downgrade reflects our expectation that KPN's financial ratios will remain weak in 2014-15 with no prospects of recovery in the short-term to levels commensurate with the previous Baa2 rating category," Ivan Palacios, Moody's vice president, senior credit officer and lead analyst for KPN, said in a news release.

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