Sprint Nextel moves into junk status, gets new CFO

Standard & Poor’s Ratings Services lowered its corporate credit and senior unsecured ratings on Sprint Nextel Corp. to BB from BBB- and removed the company’s ratings from CreditWatch with negative implications. The downgrade moves Sprint Nextel out of the investment-grade category and into junk status.
“The downgrade is based on our assessment that Sprint Nextel’s business risk profile is no longer supportive of an investment-grade rating given its deteriorating operating performance and lack of visibility in the wireless business, along with increased financial leverage due largely to declining EBITDA,” said Standard & Poor’s credit analyst Allyn Arden
The ratings firm placed Sprint Nextel on CreditWatch in February after the company warned of steep postpaid subscriber losses. S&P said it expects Sprint Nextel’s operating and financial results to remain under pressure over the next couple of years.
The downgrade coincided with the arrival of a new CFO for Sprint Nextel. Robert H. Brust was named its new CFO effective immediately. Brust previously was CFO at Eastman Kodak Co. and CFO of Unisys Corp. He also spent 31 years with General Electric.
William Arendt, senior VP and controller, has been serving as interim CFO since Paul Saleh and two other executives were ousted earlier this year in a management shakeup.
The company is expected to report first-quarter results May 12.