FT bail-out on the cards

France Télécom is facing the unpalatable prospect of a rights issue after Moody’s recently placed the embattled telco on a negative credit watch.

The ignominy of a rights issue has drawn closer for France Télécom (FT), after Moody’s placed the French incumbent’s Prime-2 short-term rating under negative watch on May 13. This action has paved the way for a possible two-notch downgrade of FT’s long-tem rating from its current Baa1 level, as concerns intensify over FT’s ability to reduce its €60 billion debt mountain.

“France Télécom will need to carry out a rights issue in order to strengthen its balance sheet,” says Louis Landemann, telecom

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