On Feb. 26, 2002, Standard&Poor's placed its ratings on Germany-based telecommunications operator Deutsche Telekom AG on CreditWatch with negative implications. This action follows the refusal of the German Federal Cartel Office to approve Deutsche Telekom's planned sale of cable assets to Liberty Media Corp. The CreditWatch placement reflects Standard&Poor's concern that the collapse of the cable sale, together with the ongoing weakness of equity valuations for telecoms stocks, make it increasingly unlikely that Deutsche Telekom can deleverage sufficiently during 2002 to maintain its current ratings. The ratings on Deutsche Telekom had assumed a substantial improvement in the group's credit protection measures in 2002. The improvement was to be driven by a net debt reduction of about
