Digital Equipment Corp has now been stripped of its coveted A-grade credit rating by Moody’s Investors Service Inc, in a move that mirrors the cut by Standard & Poor’s Corp. Moody’s downgraded DEC’s senior long-term debt to Baa2 from A3, saying that it believes that its turnaround and return to profitability will require more drastic restructuring actions, and that market demand for the Alpha AXP system architecture may not offset anticipated ongoing revenue declines in the mainstay VAX-related businesses. Moody’s assigned prospective ratings of (P)Baa2 to the shelf registration for senior debt, (P)Ba1 to the subordinated debt and (P)’ba1′ to the preferred stock. The ratings recognise the challenges facing the company, but also reflect its conservative financial management as well as the moderately leveraged balance sheet, Moody’s said.
