S&P cuts Sprint Nextel credit rating to non-investment grade

A "BB" rating is non-investment grade, also known as "junk" status.

Sprint had about $22 billion of outstanding debt as of Dec. 31, 2007, S&P said.

The downgrade is based on Sprint's "deteriorating operating performance and lack of visibility in the wireless business, along with increased financial leverage due largely to declining (earnings before interest, taxes, depreciation and amortization)," said Standard & Poor's credit analyst Allyn Arden in a statement.

Sprint has struggled with massive subscriber losses and weak financial performance since it bought Nextel in 2005. It expects to lose millions of subscribers this year.

Shares of Overland Park, Kan.-based Sprint rose 1 cent to $8 in afternoon trading. The company also named a new chief financial officer on Thursday.