TCNZ has announced that it had reached an agreement with Crown Fibre Holdings Ltd. (CFH) that would allow TCNZ's access network business, Chorus, to build and own at least 70% of the proposed UFB network in New Zealand. Consequently, we believe a full demerger of TCNZ's access network business and related infrastructure into a separately listed entity is increasingly likely. The ratings on TCNZ remain on CreditWatch Negative, pending shareholder and legislative approval of a demerger. We believe a demerger will weaken TCNZ's strong business risk profile, and may lower the long-term rating on TCNZ by one or two notches. On May 27, 2011, Standard&Poor's Ratings Services maintained its 'A' long-term and 'A-1' short-term ratings on Telecom Corp
