Fitch Ratings said Tuesday that it has downgraded Verizon Communications Inc.'s (VZ) long-term Issuer Default Rating to 'A-' from 'A' and short-term IDR to 'F2' from 'F1'.
The Rating Outlook is Stable.
The downgrade follows a review of Verizon's proposed acquisition of Vodafone Group, PLC's U.S. group, with its principal asset of 45% of Verizon Wireless, for $130 billion.
Fitch said the acquisition pressures Verizon's near-term credit metrics, pushing pro forma leverage at closing to approximately 2.8x. Subsequent to the close of the acquisition, Fitch expects Verizon to reduce debt. EBITDA growth, combined with debt reductions are expected to reduce leverage to approximately 2x by the end of 2016, which Fitch believes is appropriate for a 'A-' rating.
For comments and feedback: editorial@rttnews.com