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Fitch Continues to Rate Verizon Following Plans to Stop Providing Telephone Subsidiary Financials

^{Published on 2011-07-06 19:20:33 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--Fitch Ratings plans to continue to rate Verizon Communications Inc.'s (Verizon) (NYSE: VZ) telephone subsidiaries following the company's decision to stop providing individual financial statements for its operating telephone subsidiaries effective for the first quarter of 2011.

On June 24, 2011, Verizon put in place a guarantee of the principal, interest and premium (if any) due on the outstanding debentures and first mortgage bonds of 10 domestic operating telephone subsidiaries. This debt consists of 31 issues with a total outstanding value of more than $8 billion. The guarantee is in place as long as the subsidiaries remain 100% wholly owned subsidiaries.

Fitch has rated the senior unsecured debt of Verizon and the 10 operating telephone subsidiaries at the same level since July 2004, given the consolidation of the financing activities of the subsidiaries at the parent level in 2003 and the strategic importance of those subsidiaries to Verizon. In addition, Verizon has supported its subsidiaries, as needed, through reduced dividend levels as well as capital contributions. Should access line sales occur Fitch will take into account on a case-by-case basis the effect the transaction will have on the debt of the affected entity.

Verizon's Issuer Default Ratings (IDRs) and debt ratings are as follows:

-- Long-Term IDR at 'A';

-- Senior unsecured debt at 'A';

-- Short-Term IDR at 'F1';

-- Commercial paper at 'F1'.

The operating telephone subsidiaries ratings are as follows:

Verizon Delaware
Verizon California
Verizon Florida
Verizon Maryland
Verizon New England Inc.
Verizon New Jersey
Verizon New York Inc.
Verizon Pennsylvania
Verizon Virginia

-- IDR at 'A';

-- Senior unsecured at 'A'.

GTE Southwest

-- IDR at 'A';

-- First mortgage bonds at 'A'.

The Rating Outlook is Stable.

Additional information is available at '[ www.fitchratings.com ]'.

Applicable Criteria and Related Research:

-- 'Rating Global Telecoms Companies' (Sept. 16, 2010);

-- 'Corporate Rating Methodology' (Aug. 16, 2010).

Applicable Criteria and Related Research:

Rating Global Telecoms Companies - Sector Credit Factors
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=550205 ]

Corporate Rating Methodology
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=546646 ]

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