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To: charlespat who wrote (50308)	6/18/2001 10:30:46 AM
From: Rocket Red	Read Replies (1) \| Respond to of 62348

THIS NEWS GOSSIP?LOL Networks Corp - Rating Review Nortel Networks Ltd. downgraded to A (low) by DBRS Nortel Networks Corp NT Shares issued 3,099,655,476 2001-06-15 close $15.17 Monday Jun 18 2001 Rating Review Mr. Paul Holman of Dominion Bond Rating Service reports Rating: A (low) Trend: Negative Rating action: Downgrade Debt rated: Notes and other long- term senior debt Rating: Pfd-2 (low) Trend: Negative Rating action: Downgrade Debt rated: Class A, redeemable preferred shares Rating: Pfd-2 (low)n Trend: Negative Rating action: Downgrade Debt rated: Class A, non-cumulative redeemable preferred shares Nortel Networks Ltd.'s (Nortel) ratings have been downgraded to A (low) from A for long-term debt and to Pfd-2 (low) from Pfd-2 for cumulative preferred shares, all with negative trends. Nortel Networks Ltd. is a wholly owned subsidiary of Nortel Networks Corp. The dramatic downturn in several of the company's core markets, as indicated in the company's recent announcement, continues to cause reductions in DBRS's outlook for sales growth and margins for 2001 and 2002. Even if there is industry stabilization in 2002, Nortel will face intense competition from other major telecom equipment suppliers, which are facing similar difficulties. The rating downgrade reflects the heightened level of uncertainty concerning the telecom equipment industry. While Nortel has access to the capital markets and bank facilities to finance its negative free cash flow, it must continue to quickly implement cost-cutting initiatives and remain customer-focused in order to turn free cash flow positive, in line with the more modest outlook for its core sectors. Given the $2-billion (U.S.) of additional bank debt (if fully drawn) and the $14.9-billion (U.S.) non-cash writedown related to good will and discontinued operations of Nortel Networks Corp., Nortel's debt-to-capital ratio will increase from approximately 11 per cent to over 35 per cent, with a related decline in coverage ratios. (c) Copyright 2001 Canjex Publishing Ltd. canada-stockwatch.com old url (better for printing)