MOODY'S UPGRADES THE DEBT RATINGS OF CORNING; UPGRADES THE DEBT OF OAK INDUSTRIES
Moody's Investors Service upgraded the debt ratings of Corning Incorporated (Corning) to reflect Corning's improving profitability and cash flows, solid margins, and the expectation that supply/demand factors for optical fiber and liquid crystal displays will provide steady growth opportunities in the near-to-intermediate term. At the same time, the long term debt rating of Oak Industries, Inc. (Oak) was upgraded to reflect that the equity-financed Oak transaction closed January 28th and that Corning will legally assume Oak's debt obligations. The ratings actions also incorporate Corning's successful equity offering that yielded net proceeds of roughly $2 billion. These proceeds initially will be used to fund the $1.4 billion Siemens acquisition, the first phase of which closed on February 2nd. Residual proceeds will pay off outstanding short term debt at Corning and the bank borrowings of Oak. In addition, the rating agency noted that the ratings upgrade recognizes the company,s global leadership position in optical fiber and cable, its efficient, low-cost manufacturing base, and its growth prospects in all its businesses. Corning will augment its organic growth through acquisitions, but Moody's expects that the funding of these acquisitions will be in a manner consistent with the company's stated conservative financial philosophy. In the near term, the rating agency expects that improving cash flows, remaining proceeds from the equity offering, and a euro 500 million debt offering will fund capital investment, niche acquisition activity, dividend and share repurchase requirements. Corning's rating outlook is stable.
Corning Incorporated -- Senior, unsecured notes, debentures, and IRBs to A2 from A3; senior, unsecured securities to (P) A2 from (P)A3 and preferred stock to (P)"a2" from (P)"a3", issued pursuant to its 415 universal shelf registration; senior, unsecured long-term debt rating for bank revolving credit facility to A2 from A3; and short term debt rating to Prime-1 from Prime-2.
Corning Finance B.V. -- Senior, unsecured securities to (P)A2 from (P)A3, issued pursuant to its 415 universal shelf registration when guaranteed by Corning.
Oak Industries Inc. -- $100 million 4.875% convertible subordinated debt to A3 from B2.
Oak Industries, Inc. -- $300 million senior, unsecured bank debt rated Ba3 withdrawn.
Oak Industries Inc., headquartered in Waltham, MA, is a leading manufacturer of highly-engineered components that it sells to manufacturers and service providers in the communications and selected other industries.
Corning Incorporated, headquartered in Corning, NY, focuses in three business segments: Telecommunications, Advanced Materials, and Information Display through a global network of businesses, subsidiaries, and equity-venture companies.
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