UPDATE: Jefferies Downgrades Telefonica to Underperform on Debt Concerns

Jefferies lowered its rating on Telefonica

from Hold to Underperform. Jefferies noted, "With EBITDA declines increasingly entrenched, TEF is struggling to break its ever tightening debt spiral. Asset sales improve liquidity, but not leverage. We now see the risk of a rights issue looming large. While likely to be taken negatively at first, TEF should in time benefit from a lower beta. Our estimates of the medium term upside potential however, are still far below the current share price." Telefonica closed at $14.54 on Monday.