S&P lowered its long-term corporate credit rating on Motorola to 'BB+' from 'BBB'. At the same time, S&P lowered its rating on the senior unsecured debt to 'BB+' (at the same level as the 'BB+' corporate credit rating on the company). S&P also assigned a recovery rating of '3' to this debt, indicating the expectation for meaningful (50% to 70%) recovery in the event of payment default. S&P lowered the long-term ratings to 'BBB' reflecting further deterioration of the Mobile Devices unit's operating performance. "The current rating action reflects continual operational challenges in the Mobile Devices unit, which are not likely to be reversed over the intermediate term, leading to depressed profitability and returns, adjusted debt leverage over 4x, and substantially diminished free cash flows."
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