Moody's may cut Cincinnati Bell Inc
biz.yahoo.com
NEW YORK, July 21 - Moody's Investors Service placed the ratings of Cincinnati Bell Incorporated (CBI) and Cincinnati Bell Telephone Company (CBT) under review for possible downgrade, and placed the ratings of IXC Communications, Inc. (IXC) and IXC Communications Services, Inc. (IXCC), under review for possible upgrade.
The reviews are prompted by the recent announcement that the two company's have signed a definitive agreement to merge in a stock for stock exchange and assumed debt.
The transaction is valued at approximately $3.2 billion dollars.
The agreement calls for the exchange of IXC common shares at a fixed exchange rate for CBI common stock and the assumption by CBI of IXC's outstanding debt obligations.
The merger will result in the combination of CBI's local and wireless operations and data initiatives with IXC's nationwide fiberoptic network.
The combined entity is expected to have over one million customers connected by a coast-to-coast fiberoptic network of approximately 13,000 miles.
The ratings review will focus on the operating and financial strategies of the combined company, including the funding requirement associated with the continued expansion of IXC's fiber optic network, as well as the ultimate capital structure of the combined entity.
Moody's does not anticipate any significant regulatory hurdles to develop and expects to complete the review expeditiously.
The ratings on review for possible downgrade are: Cincinnati Bell Inc. - Senior unsecured debt at A3; senior unsecured shelf registration rated (P)A3; and short-term commercial paper rated Prime-2.
Cincinnati Bell Telephone Company - Senior unsecured debt rated A2, and guaranteed senior unsecured shelf registration rated (P)A2.
The ratings on review for possible upgrade are: IXC Communications, Inc. - Senior subordinated debt rated B3, and preferred stock rating of ''caa.''
IXC Communication Services, Inc. - Senior secured bank credit facility rated Ba3.
Cincinnati Bell Inc. is a telecommunications company headquartered in Cincinnati, Ohio.
IXC is headquartered in Austin, Texas.
Copyright © 1999 Reuters Limited. All rights reserved. |
