Moody’s cuts British Telecom

Moody’s Investors Service said it downgraded to Baa2 from Baa1 the long-term issuer ratings of British Telecommunications plc and EE Ltd.

Concurrently, Moody's downgraded to Baa2 from Baa1 the senior unsecured ratings of British Telecommunications and EE Finance plc and to provisional Baa2 from provisional Baa1 British Telecommunications’ medium-term note program and senior unsecured shelf ratings, as well as EE Finance’s senior unsecured medium-term note program rating.

The outlook is stable.

"The ratings downgrade reflects our expectation that BT's credit metrics will remain weak due to a deterioration in its underlying operating performance trends, a significant capital spending risk, and the sustained large pension deficit, further weakening the company's cash flow generation and delaying the company's deleveraging prospects," Laura Pérez, Moody's vice president and senior analyst, said in a news release.

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