Put this in your smoke and pipe it.....
Moody's ups Nextel Communications <NXTL.O>
NEW YORK, Oct 27 - Moody's Investors Service today upgraded the long-term senior unsecured debt ratings of Nextel Communications, Inc. to B1 from B2, the issuer rating to B1, and the preferred stock rating to "b3" from "caa."
The rating on the $5 billion secured credit facility of Nextel Finance Company has been upgraded to Ba2 from Ba3.
Nextel's senior implied rating has also been upgraded to Ba3 from B1.
The outlook for all these ratings is stable.
The ratings upgrade is prompted by the recent announcement that Nextel will be issuing 25 million shares of its common stock to raise approximately $2 billion of equity.
While Nextel's domestic operations have been performing well, with the growth in cash flow and the company's ample liquidity putting upward pressure on the ratings, uncertainty surrounding the company's strategy for its international markets as well as the possible expansion into the domestic consumer marketplace has held back the ratings.
The proposed equity offering greatly allays these concerns.
The Ba3 senior implied rating reflects the value of Nextel's national wireless platform, the company's differentiated service offering and strong execution to date with healthy subscriber growth, high ARPUs, low churn and rapidly growing cash flow.
The senior notes are notched down from the senior implied rating to reflect their subordination to outstandings under the secured credit facility, and the credit facility is notched up to reflect its priority claim on assets and cash flows of the company's operating subsidiaries.
Nextel has been pursuing the acquisition of PCS spectrum licenses currently owned by NextWave.
Should Nextel be successful in this pursuit, the company would have the spectrum necessary to expand its wireless service offering into the consumer marketplace.
While Nextel's chances for success in acquiring the NextWave licenses and the ultimate terms of that acquisition remain uncertain, Moody's is comforted that the company is positioning itself to fund the potential acquisition of the licenses and to build out that spectrum with a good balance of debt and equity.
Based in Reston, Virginia, Nextel is a nationwide provider of digital wireless communications services to over 4 million subscribers in the United States, and through a wholly-owned subsidiary, Nextel International, has wireless operations and investments in eight foreign countries.
15:43 10-27-99 |
