Micropolis Bond Rating Downgraded to Single B2
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Moody’s Investor Service in New York, one of the major bond rating agencies, has downgraded its rating on $75 million of Micropolis Corp.’s bonds due for payment in 2012 to Single-B2 from Single-B1.
Micropolis, the Chatworth computer-disk drive company, recently reported a $12.6-million loss in its third quarter, compared to a profit of $7 million a year earlier.
The rating agency noted that “pricing pressure and excess capacity” in the hard-disk drive business had prompted a deterioration in Micropolis’ “financial condition and the difficult challenge of achieving a turnaround over the intermediate term.”
Moody’s said: “Micropolis’ future outlook is one of increased risk.”
Bond ratings seek to gauge the likelihood of a company defaulting on payment. Bond ratings range from AAA to D (or default). A company’s bond rating directly affects the rate of interest it will have to pay to investors when it tries to raise money in the bond market.
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