S&P cuts Telecom Italia to junk, outlook negative

MILAN Thu Nov 14, 2013 1:07pm EST

MILAN Nov 14 (Reuters) - Ratings agency Standard & Poor's said on Thursday it had downgraded Telecom Italia to junk with a negative outlook due to its persistently high level of debt.

Telecom Italia rating was reduced to 'BB+' from 'BBB-'.

"Telecom Italia will likely continue to face tough competitive, economic, and regulatory environments in Italy," the ratings agency said.

S&P said the negative outlook reflected the possibility of possible further rating downside if the group fails to improve domestic operating performances, accelerate debt reduction, and bolster cash flow protection metrics.

Telecom Italia unveiled last week plans to raise 4 billion euros ($5.4 billion) through a 1.3 billion euros convertible bond and asset sales to fix its balance sheet and help fund investments. ($1 = 0.7430 euros) (Reporting by Danilo Masoni; editing by Francesca Landini)

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