S&P Cuts WorldCom Credit Rating
On June 26, 2002, Standard & Poor's lowered its long-term corporate credit rating on WorldCom (WCOM ) to 'CCC-' from 'B+' following the company's announcement that it intends to restate financial statements for 2001 and the first quarter of 2002 due to the overstatement of EBITDA by about $3.8 billion.
All ratings remain on CreditWatch with negative implications. Clinton, Miss.-based WorldCom had about $30 billion of total debt outstanding as of Mar. 31, 2002.
The downgrade reflects the high degree of uncertainty surrounding WorldCom's ability to ultimately pay its outstanding debt. Furthermore, the restatement and the expansion of the SEC investigation could adversely impact the current bank negotiations and the company's ability to retain customers. These events increase the likelihood of a debt restructuring or Chapter 11 filing near term.
From Standard & Poor's CreditWire