Sprint Bonds Reel on Moody's Blow as Losses Top $1.5 Billion
- Moody's lowers rating to six levels below investment grade
- Cites brutal competition and refinancing risk as concerns
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Bondholders of wireless carrier Sprint Corp. were blindsided after Moody’s Investors Service cut the credit rating of the largest U.S. junk-rated company.
Sprint bonds lost more than $1.5 billion since Moody’s lowered the company’s credit rating yesterday to B3 from B1, or six levels below investment-grade, citing "brutal competition" in the U.S. wireless industry that will pressure even the strongest operators. The New York-based ratings firm also cast doubt on the telecom operator’s ability to refinance more than $12 billion of debt coming due in the next five years without additional support from its majority shareholder -- Softbank Group Corp.