Philips Electronics NV has lost its cherished A-level rating on its debt: Moody’s Investors Service Inc has downgraded the company’s senior debt rating to Baa1 from A3. About $1,500m of long-term debt is affected. The downgrade is based on both the reduced predictability of the company’s cash flows, due to intensifying price competition in consumer electronics and electronic components, and the growing likelihood of additional restructuring costs, the rating agency said. Moody’s affirmed the Prime-2 short-term rating for commercial paper of North American Philips Corp. It says it expects that, in addition to continuing its cost savings programme, Philips will institute further segment restructuring measures that should adjust capacities to lower demand levels and raise productivity.
