April 24 (Bloomberg) -- Bonds of Nokia Oyj fell after Fitch Ratings lowered its grades to junk and said it might cut again if the mobile phone manufacturer is unable to stabilize its finances.
The yield premium investors demand to hold the 500 million euros ($658 million) of 6.75 percent bonds due 2019 the Espoo, Finland-based company issued in 2009 increased 19 basis points to 636, according to Bloomberg Bond Trader prices. Spreads on its 1.25 billion euros of 5.5 percent bonds maturing 2014 also widened, increasing 70 basis points to 4.91 percent.
The long-term rating was lowered by one step to BB+, the highest junk ranking, Fitch said a statement today. Fitch kept its negative outlook and said it may reduce the grade further if Nokia’s revenue doesn’t stabilize and operating margins don’t turn positive.
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