Moody's downgrades Lantiq

Moody's Investors Service said it downgraded Lantiq Deutschland GmbH's corporate family rating to Caa2, the probability of default rating to Caa3, the rating on the $110.75 million senior secured term loan to Caa2 and placed all ratings on review for further downgrade.

Moody's said the downgrade follows weaker than expected operating performance in the third quarter of fiscal year 2012 with limited prospects for short term improvements.

As a result, Moody's said it deems a breach of covenants under the senior secured term loan on Sept. 30 and the restructuring of the current capital structure as likely.

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