Revised Moody’s Rating

Revised Moody’s Rating Will Not Significantly Affect Telecom

Telecom said today a downgrade by credit rating agency Moody’s Investors Service will have no material impact on the company’s ability to raise capital in international debt markets.

Moody’s has assigned a long-term rating for senior unsecured debt of A2 with a negative outlook. This action has brought Moody’s into line with the A ratings assigned by both Standard and Poor’s and Fitch Ratings, although both of those agencies had a more positive ‘stable’ outlook.

Chief Financial Officer Marko Bogoievski said Telecom was disappointed that Moody’s had assigned a rating with a negative outlook, as the Group is confident of improving cash flow and credit fundamentals in the future.

“Our drive for better performance, particularly in Australia, is producing significantly improved results. The Group’s EBITDA for the quarter ended 31 March 2002 was NZ$573 million, up 7.3% on the corresponding period in 2001. Capital expenditure is also being kept under a tight rein,” he said.

Telecom’s short-term debt rating of P-1 was confirmed by Moody’s in February 2002.

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