NEW YORK-Alltel Corp.’s board of directors declared a 38.5 cent quarterly dividend on shares of common stock, while Standard & Poor’s Ratings Services bumped Alltel’s corporate credit ratings down a notch.
Standard & Poor’s downgraded both Alltel’s long-term and short-term credit rating one notch apiece, but removed them from its CreditWatch list and gave the company a stable outlook. However, the corporate credit ratings and senior unsecured debt ratings on Alltel’s wireline subsidiaries stayed on the list “because debt at these entities will be assumed by a new holding company to be formed by the combination of Alltel’s wireline business and that of local exchange carrier Valor Communications Group Inc.,” Standard & Poor’s noted.
The move comes one day before Alltel is scheduled to announce its fourth-quarter financial results. Analysts expect the carrier to post anywhere from 75,000 to 90,000 net customer additions for the quarter, concluding that Alltel experienced relatively weak growth in the fourth quarter due to churn from properties it bought from Cingular Wireless L.L.C. and Alltel’s acquisition of Western Wireless Corp. The Western Wireless deal is expected to close in the first quarter of 2006. However, Morgan Stanley reported that one of its recent surveys showed that Alltel was gaining a higher percentage than other operators of postpaid customers who had churned from other carriers.
