Standard & Poor's Ratings Services said today that the NZ$188 million loss reported by Telecom Corp. of New Zealand Ltd. (TCNZ) does not of itself impact the company's single-'A'/Stable/'A-1' corporate credit rating. The loss is largely attributable to a noncash NZ$850 million write-down of the company's Australian subsidiary, AAPT Ltd. (single-'A'/Stable/'A-1'), with the group generating sufficient free operating cash flow to allow meaningful debt reduction and improvement of its financial risk profile in the next two years. A sluggish operating environment in New Zealand and Australia has affected TCNZ's revenue growth; however, cost-cutting initiatives have supported margin expansion and continued growth in underlying earnings. Standard & Poor's believes TCNZ remains committed to its expansion into the Australian market and to
