Apple Computer Inc’s credit ratings are in the Moody’s Investors Service Inc spotlight, and it doesn’t look good: Moody’s says it may downgrade Apple’s (P)Baa1 senior shelf registration, Baa1 senior unsecured long-term notes due 2004 and Prime-2-rated short-term debt. The review covers about $300m in long-term debt. Moody’s cited its concern that Apple’s operating performance challenges may be significant enough that Apple’s current ratings no longer adequately reflect investor risk. In its review, Moody’s will focus on the market demand outlook for Apple’s new Power Macintosh personal computers and its established Macintosh line as well as the outlook for revenues and gross and operating margins at Apple, the agency said. Moody’s will also assess Apple’s cash flow sufficiency and its ability to continue to cut expenses while maintaining sufficient investment levels.
