Telecom Corp. of New Zealand (TCNZ) has submitted a proposal to structurally separate its fixed-line access network from its remaining business. We have placed the ratings on the company on CreditWatch negative, reflecting our view that the ratings on TCNZ are likely to be lowered by one to two notches if the proposed structural separation is completed. On Aug. 4, 2010, Standard&Poor's Ratings Services placed its 'A/A-1' ratings on TCNZ and its related entities and debt issues on Creditwatch with negative implications. The CreditWatch placement followed TCNZ's announcement that it has submitted a proposal to Crown Fibre Holdings to structurally separate TCNZ's fixed-line access network from its remaining businesses. Crown Fibre Holdings (CFH) is a New Zealand government-owned
