Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​​

I AGREE
Rating Action:

Moody's affirms CenturyLink as Baa3

Global Credit Research - 01 Apr 2011

Qwest Subsidiaries Upgraded, Outlook stable

New York, April 01, 2011 -- Moody's Investors Service has affirmed its Baa3 senior unsecured and Prime-3 short term debt ratings for CenturyLink, Inc. ("CenturyLink") on the close of its acquisition of Qwest Communications International Inc. ("QCII"). Additionally, Moody's has upgraded QCII and Qwest Capital Funding Inc. ("QCF") to Baa3 from Ba2 and Ba3 prior respectively. Moody's ratings for Qwest Corporation ("QC"), the ILEC subsidiary of QCII, remain unchanged at Baa3.

Moody's has also changed the outlook for CenturyLink to stable from negative. These rating actions conclude Moody's review of the ratings for QCII which was begun upon the announcement of this merger.

RATINGS RATIONALE

The upgrade of Qwest's ratings reflect the improved financial flexibility resulting from its acquisition by investment grade rated CenturyLink, our view that the merger will be positive to the credit profile of Qwest as the combination of the two companies can better leverage Qwest's national fiber network while reducing costs and our expectation that leverage at the QCII level will decline steadily as maturing debt at this entity and at QCF is paid down over time.

Moody's senior vice president Dennis Saputo said, "the stabilization of the company's rating outlook is based on the relatively strong operating performance of CenturyLink and Qwest over the last several quarters and CenturyLink's success in achieving the targeted synergies from the Embarq merger." Moody's believes that the challenges associated with another large acquisition so soon after the prior one are manageable given the company's long track record of successfully integrating large purchases and that the company will continue to manage its balance sheet and liquidity in a manner consistent with an investment grade rated company. "CenturyLink's acquisition of Qwest creates large economies of scale and the potential for strong free cash flow generation," Saputo continued.

CenturyLink's Baa3 rating reflects Moody's expectations that the combined company's pro forma leverage will remain between 2.8 and 3.0 times Debt to EBITDA (Moody's adjusted, before synergies) over the next two to three years and that its dividend payout ratio will decline modestly, although the absolute level of dividends will increase. While the acquisition of Qwest significantly increases CenturyTel's exposure to more competitive urban/suburban markets (Moody's estimates that about about 80% of Qwest's access lines are in five metropolitan markets), the enhanced scale of the Company, combined with the addition of Qwest's national state-of-the-art fiber optic network, is expected to generate meaningful expense and capital efficiencies, especially those related to transport costs, network expansion and new product development. The new company should be able to capitalize on growth in enterprise services revenues, especially as the economy rebounds and given Qwest's selection as one of three carriers competing for the U.S. Government's Networx contract. The combined company is expected to generate significant free cash flow, especially after anticipated synergies. The rating also reflects management's commitment to an investment grade rating and its historically balanced use of free cash flow between debt reduction and shareholder returns.

Moody's believes that if realized, the synergies from the merger could offset the expected decline in cash flows over the rating horizon caused by access-line erosion and slowing broadband growth. In addition, enhanced operating scale and strong free cash flow generation affords the Company the ability to spend capital to improve its competitive position and develop product offerings, such as wireless services and IPTV.

The rating also considers the significant execution risks of integrating a much larger company (Qwest is roughly twice the size of CenturyLink) with an extensive geographical footprint, and sustaining revenue growth while continuing to realize synergies from headcount reductions and system conversions.

Moody's anticipates that the combined company will have total debt (Moody's adjusted) of $23 billion and leverage of just over 3.0x at year end 2011. The merger is expected to offer cost savings opportunities of up to $625 million annually, which, combined with flat to slightly lower revenues, will result in leverage falling below 3.0x by year-end 2012 and 2.7x by year-end 2013. Moody's does not anticipate leverage declining materially once merger synergies are fully realized as the 2.7x Debt to EBITDA ratio (Moody's adjusted) is close to management's target leverage metric. We anticipate share repurchases will remain the primary use of excess cash flows and that the majority of debt will be refinanced at maturity once leverage hits about 2.7x .

The merged company will have operations in 37 states with 15 million access lines and over 5 million broadband subscribers. Qwest's exposure to business clients and more dense urban markets will increase the company's exposure to competitive markets, but will also reduce risk associated with universal service subsidies.

The long term viability of wire line only carriers relies upon their ability to transform from regulated, voice-centric businesses to de-regulated broadband focused providers. Carriers like CenturyLink will continue to lose subscribers to wireless substitution and competition from cable providers. Wireless substitution, once confined to voice services, could threaten broadband as wireless data speeds continue to increase.

CenturyLink continues to invest in broadband services and claims that the combined company will have the capability to provide 5 Mb per second data throughput to almost 60% of its access line footprint. CenturyLink will introduce IPTV services in selected markets and continue to push video services in the former Qwest footprint. Moody's believes that CenturyLink will continue to invest capital into higher speed broadband and video services to remain relevant in the consumer market. However, this investment, combined with the company's rich dividend, will limit future debt repayment.

The addition of Qwest brings a strong enterprise business service offering to CenturyLink. Qwest's long-haul transport network will offer expense savings and allow for growth of enterprise customer revenues. Qwest's higher business services revenues will also result in a more balanced mix of revenues for the new company. CenturyLink's enterprise revenues will increase to almost 40% of total revenues from less than 25% prior to the merger. USF and switched access revenues will represent less than 10% of total revenues versus almost 15% prior, lowering the potential impact of an adverse regulatory change to the current subsidy rules.

CenturyLink's Prime-3 short-term debt rating reflects its modest cash balance, ample committed back-up facility, manageable near-term debt maturities and our expectation for significant free cash flow over the next 12-18 months. In January of 2011, CenturyLink entered into a $1.7 billion (after deal close) 4-year revolving credit facility. The facility has financial covenants which require total company leverage to remain below 4.0x, interest coverage of at least 1.5x. The facility is guaranteed by Embarq Corp., QCII and Qwest Services Corp. ("QSC"), and requires that leverage at Qwest Corp. remain below 2.85x.

Moody's could raise CenturyLink's ratings if the company can grow revenues, EBITDA and cash flow, while sustaining debt to EBITDA close to 2.0x and FCF to debt above 10%. Moody's believes that achieving this growth is dependent on the company's ability to successfully implement its local market strategy in the very large Qwest markets, develop and deploy competitive broadband and video product offerings in all its large markets, grow market share in the enterprise segment (where it currently has about a 5% market share), capitalize on new growth opportunities (i.e. Fiber to the cell tower), realize the targeted synergies while continuing to cut costs above and beyond these synergies.

Moody's could downgrade CenturyLink's long-term rating if the Company's operating performance deteriorates and its EBITDA continues to decline, such that the merged entity is unable to sustain financial leverage (Total debt-to-EBITDA, Moody's adjusted) of less than 3.0x and if the free cash flow generation falls into low single digit percent of total debt, both on a sustained basis.

Moody's believes that a sustained decline in EBITDA (excluding one-time items) exceeding a rate of 3% could put enormous pressure on CenturyLink's ability to repay debt while continuing to return cash to shareholders, stay competitive and maintain leverage consistent with an investment grade rating.

Negative rating pressure could develop if CenturyLink's integration with Qwest adversely affects the operating performance of the combined company, resulting in a weakened competitive position, evidenced by a rapid acceleration in access-line losses, or if the Company's liquidity becomes strained as a result of significant delays in realizing merger synergies.

In addition, the rating could be lowered if management's financial policies no longer remain supportive of a strong balance sheet consistent with an investment grade rating.

The last rating action for CenturyLink was on April 22, 2010 when the company's outlook was changed to negative. Moody's last rating action for Qwest was on August 13, 2010 when the company's ratings were raised.

The principal methodology used in rating CenturyLink was Moody's Global Telecommunications Industry, published in December 2010 and available on www.moodys.com. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.

CenturyLink, headquartered in Monroe, Louisiana, is a regional communications company engaged primarily in providing telephone and broadband services in various, predominately rural, regions of the United States. The company served approximately 7.0 million total access lines in 33 states as of December 31, 2010.

Moody's has taken the following rating actions:

Issuer: CenturyLink, Inc.

..Senior Unsecured -- Baa3 (unchanged)

..Short Term Rating -- P3 (unch.)

..Outlook -- Stable from Negative

Issuer: Embarq Corp.

..Senior Unsecured -- Baa3 (unch.)

..Outlook -- Stable from Negative

Issuer: Embarq Florida, Inc.

..First Mortgage Bonds - Baa1 (unch.)

..Outlook -- Stable from Negative

Issuer: Centel Capital Corp.

..Bkd Senior Unsecured Baa2 (unch.)

..Outlook -- Stable from Negative

Issuer: Carolina Telephone & Telegraph Company

..Senior Unsecured Baa1 (unch.)

..Outlook -- Stable from Negative

Issuer: United Telephone Co. of Pennsylvania

..First Mortgage Bonds Baa1 (unch.)

..Outlook -- Stable from Negative

Issuer: Qwest Communications Int'l. Inc. (QCII)

..CFR / Sr. Unsecured -- withdrawn

..PDR - withdrawn

..Senior Unsecured (Gtd. by QSC) -- Baa3 from Ba2

..Speculative Grade Liquidity Rating -- withdrawn

..Outlook -- Stable from Under Review

Issuer: Qwest Capital Funding Corp. (QCF)

..Senior Unsecured -- Baa3 from Ba3

..Outlook -- Stable from Under Review

Issuer: Qwest Corp. (QC)

..Senior Unsecured -- Baa3 (unch.)

..Outlook -- Stable from Under Review

The principal methodology used in this rating was Global Telecommunications Industry rating methodology published in December 2010.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of maintaining a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

New York
Dennis Saputo
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
John Diaz
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's affirms CenturyLink as Baa3
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.