Fitch rates Verizon’s proposed notes at ‘A’





SymbolPriceChangeVOD28.19-0.47Chart for Vodafone Group PlcVZ37.63-0.03Chart for Verizon Communications Inc. Com{“s” : “vod,vz”,”k” : “a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00″,”o” : “”,”j” : “”}

NEW YORK (AP) — Fitch Ratings said Thursday it assigned an investment grade “A” rating to Verizon Communications Inc.’s proposed offering of senior unsecured notes, with a stable outlook.

The proceeds of the offering are to be used to pay off some or all of $3.45 billion in debt owed by Verizon and its operating subsidiary before the debt matures in 2012 and 2013. Proceeds could also go to repay $1.8 billion in commercial paper outstanding.

The ratings reflect Fitch’s belief that Verizon can manage debt around 1.5 to 1.6 times its adjusted earnings and that it will continue to have strong growth in revenue, free cash flow and earnings before interest, taxes, depreciation and amortization.

Fitch said the gross debt-to-cash flow ratio was 1.55 times in the 12 months through the end of September.

Fitch said there remains some risk that Verizon could acquire Vodafone Group Plc’s 45 percent stake in Verizon Wireless, taking on debt to do so.

The ratings agency also noted that Verizon Wireless plans to pay Verizon and Vodafone $10 billion in January 2012, but it said the outlay will not have an impact on the credit profile of Verizon or Verizon Wireless.

As of Sept. 30, Verizon had $54.9 billion in debt, of which $8.6 billion matures within a year.

Verizon shares rose 79 cents, or 2.1 percent, at $37.60 in afternoon trading amid a broad stock market rally.

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Article source: http://biz.yahoo.com/ap/111027/us_verizon_fitch.html?.v=1

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