(Bloomberg) -- Telstra Corp. had its debt downgraded by S&P Global Ratings for the first time in 12 years, sending its bonds lower and compounding the years-long rout in its share price as the former phone monopoly struggles to contain competition.
The ratings company on Monday lowered the long-term issuer and issue ratings on Telstra to A- from A, citing the phone company’s vulnerability to price and market-share erosion. Competition is set to intensify, S&P said.
Telstra’s dollar bonds due in 2027 dropped 0.2 cent, the biggest decline in over a week, to 94.4 cents on the dollar, according to prices compiled by Bloomberg.
Its shares fell as much as 1.6 percent in Sydney trading. Telstra has lost more than half its market value since February 2015 as its high-margin, fixed-line access network migrates to a state-run network, and mobile-phone rivals eat into the company’s customer base. UBS Group AG said this month that Telstra might lose its A grade credit rating entirely.
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