Menu
Avaya credit rating dropped to junk status in wake of Nortel buy

Avaya credit rating dropped to junk status in wake of Nortel buy

Avaya is now the undisputedly largest unified communications vendor, but its purchase of Nortel’s enterprise business has dropped the company’s investment rating to junk status, according to Moody’s Investors Service.

The ranking for the privately held company was dropped to B3 – six steps below the lowest rating that is considered investor grade, according to the Wall Street Journal. The rating is an assessment of how credit worthy entities are.

A B3 ranking is marked by subject “high credit risk", and having "generally poor credit quality,” and is among the rankings commonly referred to as junk.

The Nortel deal has lots of potential upside for Avaya, and that includes securing the top ranking among unified communications vendors, but Moody’s says the path to integrating Nortel and solidifying that lead is perilous, the Journal reports. The borrowing as Avaya did to finance the $900 million purchase "will leave little cushion to support unforeseen operating or integration challenges and minimal ability to make material debt repayment," according to Moody’s.

Avaya has promised a roadmap for integrating Nortel products into its product line for Jan. 19, and says it was working from the time it won the bid for the bankrupt Nortel division until last week when the acquisition closed to organize the two entities into a single management architecture.

Avaya is privately owned by Silver Lake Partners and TPG Partners.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Events

Featured

Slideshows

Channel kicks 2021 into gear as After Hours returns to Auckland

Channel kicks 2021 into gear as After Hours returns to Auckland

After Hours made a welcome return to the channel social calendar with a bumper crowd of partners, distributors and vendors descending on The Pantry at Park Hyatt in Auckland to kick-start 2021.

Channel kicks 2021 into gear as After Hours returns to Auckland
The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Show Comments