Moody's today announced that it has downgraded the long-term credit rating of Ericsson from Ba1 to Ba2, removing the Credit Watch status, but leaving the Outlook Negative. Our short-term rating was not under review and is not affected by this action.

Moody's decision primarily reflects their view of the wireless infrastructure market. We reiterate our view that in the short-term the market is indeed characterized by great uncertainty and the third quarter development so far does not indicate any improvement, but we remain firmly optimistic in the longer perspective.


Considering the success of our rights offering, Moody's decision was unexpected. We believe we have sufficient liquidity to carry us through this uncertain market situation. Our cost cutting actions remain on track for returning to profit sometime next year. The incremental financial impact of Moody's decision amounts to an increase in financing costs of approximately SEK 55 million annually.
Regarding Moody's comment on additional cash calls, SEK 2.3 b. of customer credits have been put back on our balance sheet and we are discussing the other put arrangements. As a consequence of the LEAP and Quam announcements our credit commitments will be reduced. We believe Sony Ericsson has sufficient liquidity and we do not anticipate the need for a capital injection in the near term to fund their operations.