S&P cuts Alltel, rates loans BB-, notes B-

Standard & Poor's said it lowered Alltel Corp.'s corporate credit rating to B+ from BB and its $2.3 billion of senior unsecured notes B- from BB, and removed the ratings from CreditWatch where it was placed with negative implications since Feb. 23.

The downgrade is due to an expected substantial increase in the company's leverage to about 8 times when its leveraged buyout is completed.

S&P also assigned a BB- rating with 2 recovery rating to Alltel Communications Inc.'s $16.25 billion senior secured credit facility and a B- rating to its proposed $2 billion of senior unsecured notes. The agency lowered the rating on the subordinated notes at Western Wireless LLC to B- from BB.

The outlook is negative.

Proceeds will be used to help fund the company's buyout by sponsors TPG Capital and Goldman Sachs.

The ratings reflect the company's satisfactory business position, characterized by a stable growing subscriber and revenue base and good market position, the agency said.

While the company's leverage is high at about 8 times, the favorable characteristics of its business support the rating, S&P said.

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