The ratings on Telecom Corp. of New Zealand Ltd. (TCNZ) reflect its modest financial profile, with increased debt usage over the past two years resulting in below-average credit protection measures, and an above-average business profile, underpinned by its prominent market position in the New Zealand (NZ) market and expansion into the higher growth Australian market. Although TCNZ has taken steps to restore its financial risk profile following the NZ$2.1 billion acquisition of the Australian-based AAPT Ltd.ùevidenced by the NZ$500 million raising of new ordinary shares and change in dividend policy in fiscal 2001ùan increasingly competitive operating environment may hinder significant further restoration in the short to medium term. TCNZ's credit protection measures have deteriorated over the past three years as
