S&P: CenturyLink notes BB

Standard & Poor's said it assigned a BB rating and 3 recovery ratings to CenturyLink Inc.'s proposed senior notes due 2017 and 2021.

The agency also said it affirmed the BB rating on the company's tack-on senior notes due 2039. The 3 recovery rating remains unchanged and indicates 50% to 70% recovery in a default.

The proceeds will be used to fund the acquisition of data center operator Savvis Inc. or refinance existing debt, S&P said.

The agency also said it raised the ratings on the debt at Qwest Communications International and Qwest Capital Funding to BB from BB- based on improved recovery prospects. The recovery rating was revised to 4 from 5. The 4 rating indicates 30% to 50% expected recovery in a default.

This action follows the completion of Qwest Corp.'s issuance of $661 million of senior notes, proceeds of which, along with revolver borrowings, it used to redeem $825 million of notes at Qwest Corp., which ultimately improves recovery prospects for the debt at Qwest Corp.'s direct parents, Qwest Communications and Qwest Capital Funding.

The agency also said it affirmed all other ratings, including the BB corporate credit rating, on CenturyLink.

The ratings continue to reflect significant competition in its core consumer wireline phone business from cable telephony and wireless substitution, S&P said.

The ratings also consider an expectation for continued revenue declines because of ongoing access-line losses, the agency said.

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