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Downgrade Monday: AT&T, Alcatel, Nortel Slammed

AT&T Inc. (T), Nortel Networks Corp. (NT) and Alcatel-Lucent  (ALU) all closed down Monday after separate agencies downgraded the companies’ credit ratings.

Goldman Sachs cut AT&T’s to Neutral from Buy, citing, among other reasons, “incremental operating challenges.”

Nortel now sits just above junk status because, according to Moody’s, its “existing cash flow will be slowly depleted.” The chances of the embattled Nortel raising money easily are slim to none.

Finally, Alcatel-Lucent is on Standard & Poor’s “negative implications” CreditWatch.

“The CreditWatch placement follows Alcatel-Lucent’s strategy and outlook update … including the company’s forecasts of an 8 percent to 12 percent drop in its revenues in 2009, at constant currencies,” said Standard & Poor’s credit analyst Patrice Cochelin.


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