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Chorus assigned Baa2 rating by Moody's

Thursday 1st December 2011

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Chorus, New Zealand’s largest telecommunications network operator, has been assigned an investment grade credit rating by Moody’s Investors Service, reflecting its high margins and growing market position.

The Auckland-based company was given a Baa2 rating on $1.7 billion of debt. Its rating outlook is ‘stable’, reflecting the company’s stable cash flows, appropriate funding structure and liquidity profile, Moody’s said in a report.

The ratings company said Chorus could be downgraded if there were significant overruns or delays on the ultra-fast broadband rollout.

“Softer revenues, capex blowouts or changes to dividend policy would put negative pressure on the rating,” said Nicola O’Brien, a Moody’s analyst.

Chorus was carved out of Telecom, chosen by the Crown to build a fibre network for about 830,000 premises, representing approximately 70% of the UFB initiative. In all, Chorus expects to deploy about 20,000 kilometres of fibre for the UFB and Rural Broadband Initiatives by 2020.

The new fibre network will complement Chorus' existing fibre and copper network that provides about 1.8 million connections. A wide range of service providers use the network to deliver fixed line phone, broadband and data services to homes and businesses.

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