) received a shot on the arm as three major credit rating agencies,
namely, Standard & Poor's Ratings Services (S&P), Moody's
Investor Service and Fitch Ratings upgraded the credit rating of
The rating upgrade came on the back of on three considerations.
Firstly, the disinvestment of the loss making Devices and Services
division is viewed as a positive. Secondly, anticipated
stabilization of the core Network business within the next 12 -18
months despite stiff competition is another positive. Thirdly, the
recently declared capital structure optimization program of the
company has further encouraged the upgrade. Meanwhile, Nokia also
decided to reduce its debt by Euro 2 million by 2016.
S&P raised Nokia's long-term credit rating to "BB" from "B+"
and assigned a positive outlook. The company's financial risk
profile has also been elevated to "intermediate" from "aggressive."
Moody's upgraded Nokia's corporate family rating to Ba2 from B1.
The rating agency also raised the rating of the company on a
probability of default to Ba2-PD from B1-PD. The outlook on the
rating is Stable. Additionally, Fitch Ratings promoted Nokia's debt
rating to "BB" from "BB-".
Last month, Nokia sold its handset business unit to
). Nokia failed to sustain its smartphone business due to
cut-throat competition from
) iPhones and several innovative smartphones based on the Android
). This division has been incurring losses for a long time
Despite facing intense competitive pressure, Nokia's core
network business is improving steadily. Last year, the Nokia
Solutions and Networks(NSN) segment entered into a deal with
content delivery network operator, CDNetworks, to accelerate the
delivery of mobile content.
Liquid technology is a software solution for network
infrastructure that drastically reduces the need for dedicated
hardware. NSN also believes that its new Liquid Applications will
alter the competitive landscape of the telecom infrastructure gear
market by revolutionizing base stations.
Recently, Nokia initiated a Euro 5.0 billion (approximately $6.9
billion) capital restructuring program. The company also intends to
start a Euro 1.25 billion share buy-back program and will pay a
special dividend of Euro 0.26 per share totaling Euro 1 billion.
The remaining Euro 2.75 billion will be utilized to reduce
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