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Verizon Wireless' Planned $10B Distribution to Owners Will Not Affect Ratings

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^{Published in Science and Technology on Friday, July 29th 2011 at 11:26 GMT by Market Wire}  

CHICAGO--([ BUSINESS WIRE ])--In Fitch Ratings' view, Verizon Wireless' plans to pay a $10 billion distribution to its parents, Verizon Communications Inc. (Verizon) (NYSE: VZ) and Vodafone Group Plc (Vodafone), in January 2012 will not have an impact on the credit profile of Verizon or Verizon Wireless. The distribution will be in proportion to Verizon's and Vodafone's ownership interest in the Verizon Wireless partnership of 55% and 45%, respectively. The distribution does not include expected tax distributions to the partners that may occur in 2012. Verizon has indicated that the distribution is one-time in nature, and that a future distribution will not be considered until the second half of 2012.

In Fitch's opinion, the outflow of cash from the Verizon consolidated entity to Vodafone in the amount of $4.5 billion will not affect the Verizon entities' respective credit profiles. In addition, the distribution declared is toward the lower end of Fitch's expectations embodied in the current rating rationale for Verizon and Verizon Wireless.

Fitch currently rates Verizon and Verizon Wireless' issuing entities as follows:

Verizon
--Long-term Issuer Default Rating (IDR) at 'A';
--Senior unsecured debt at 'A';
--Short-term IDR at 'F1';
--Commercial paper at 'F1'.

Cellco Partnership
--IDR at 'A';
--Senior unsecured debt (co-issued with Verizon Wireless Capital LLC) at 'A'.

Verizon Wireless Capital LLC
--IDR at 'A';
--Senior unsecured debt (co-issued with Cellco Partnership) 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 - Amended
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=546646 ]

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