The ratings on Telecom Corp. of New Zealand Ltd. (TCNZ) reflect the company's strong business profile, which is underpinned by a prominent position in the New Zealand market and expansion opportunities in the higher growth Australian market. The still-small size of TCNZ's Australian operations will require further capital investment to expand over the long term. TCNZ has demonstrated its commitment to restoring and sustaining a conservative financial profile. The generation of NZ$842 million in funds from operations (FFO) for the six months ended Dec. 31, 2003, has enabled the company to reduce total debt to NZ$4.7 billion, from NZ$4.9 billion at June 30, 2003, and generate a solid EBITDA interest coverage of 6.1x and debt to EBITDA of 2x. With
