NEW YORK-Standard & Poor’s assigned its B+ rating to Nextel Communications Inc.’s offering of $1 billion worth of 7.375-percent senior serial redeemable notes due 2015, and affirmed its BB- corporate credit rating on the carrier.
S&P noted the offering was rated one notch below Nextel’s corporate credit rating due to the amount of material obligations that the credit agency said ranked ahead of the offering, including $4.5 billion of secured bank debt and $2.5 billion of current liabilities at various subsidiaries.
“The rating reflects Standard & Poor’s assessment that Nextel, with its differentiated service and experience in marketing to enterprise customers, has good prospects of maintaining its competitive edge in the near term,” said Michael Tsao, credit analyst at S&P. “In addition, the company has shown progress in improving financial leverage.”
S&P added that it did not expect Nextel to be materially challenged by competitors in the near term and that competing push-to-talk offerings could find it challenging to consistently match Nextel’s service quality in the areas of latency, reliability and multiparty calling capability.
