NEW YORK-Fitch Ratings affirmed its A+ senior unsecured rating for Verizon Global Funding and A+ implied senior unsecured rating of Verizon Communications Inc., noting progress Verizon made last year in delevering its balance sheet as well as further prospects for continuing that effort in 2003 and 2004.
Fitch cited the Federal Communications Commission’s returning of approximately $1.7 billion of Verizon Wireless Inc. deposit related to the NextWave Telecom Inc. auction as a source of delevering its balance sheet.
Fitch also noted it expected Verizon would act to maintain a consistent credit profile as it approaches potential events with respect to its investment agreement with Vodafone Group plc pertaining to Verizon Wireless, which could require Verizon or Verizon Wireless to purchase up to $20 billion of Vodafone’s interest in Verizon Wireless between 2003 and 2007 at its then fair-market value. In addition, the agreement could require a purchase of up to $10 billion in July 2003 or July 2004.
Even though Fitch said it was unlikely Vodafone would exercise the financial payments, the ratings company noted Verizon could satisfy the financial obligations with the equity of either Verizon or Verizon Wireless.
