Business Services Industry
Moody's cuts EDS' debt rating to junk status; company disagrees.
Knight Ridder/Tribune Business News, July, 2004
By Pamela Yip, The Dallas Morning News Knight Ridder/Tribune Business News
Jul. 16--Electronic Data Systems Corp. saw its $4.4 billion in debt downgraded to junk status Thursday by Moody's Investors Service, which said the Plano company hasn't moved fast enough to turn around its business.
"Although EDS is taking steps to implement a business turnaround, the pace of the company's progress is slow, and as a consequence, the level of free cash flow is not sufficient to support an investment-grade rating," Moody's said. It also gave EDS' debt a negative outlook.
The downgrade means a loss of stature in the financial community for EDS.
More practically, it means the company could be forced to pay more interest when it taps the...
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