Credit rating agencies Standard & Poor's (S&P) and Moody's Investors Service have downgraded Telstra Corp over its proposed US$3 billion joint venture with Pacific Century CyberWorks. S&P said its action reflected Telstra's strategy to target higher-risk sectors, while Moody's said the debt-funded investment showed the company's 'enhanced appetite for leverage'. Both agencies had placed Telstra, Australia's No 1 telecommunications company, on review for possible downgrade following announcement of the CyberWorks deal on April 13. S&P lowered its long-term corporate credit rating to AA from AA-plus. The rating remains on credit watch with negative implications, the agency said. Moody's downgraded Telstra's senior unsecured ratings to Aa3 from Aa2. Its ratings outlook is stable. S&P said: 'The downgrade reflects Telstra's strategy to target the higher-risk areas of data, Internet and mobile sectors for growth.'