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!

Error: Please check your email address.

Featured

Slideshows

Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP honoured leading partners across the channel at the Partner Awards 2017 in New Zealand, recognising excellence across the entire print and personal systems portfolio.

Meet the top performing HP partners in NZ
Tech industry comes together as Lexel celebrates turning 30

Tech industry comes together as Lexel celebrates turning 30

Leading figures within the technology industry across New Zealand came together to celebrate 30 years of success for Lexel Systems, at a milestone birthday occasion at St Matthews in the City.​

Tech industry comes together as Lexel celebrates turning 30
HP re-imagines education through Auckland event launch

HP re-imagines education through Auckland event launch

HP New Zealand held an inaugural Evolve Education event at Aotea Centre in Auckland, welcoming over 70 principals, teachers and education experts to explore ways of shaping and enhancing learning using technology.

HP re-imagines education through Auckland event launch
Show Comments