Moody's may up Rural Cellular

Moody's Investors Service said it placed the debt and preferred stock of Rural Cellular Corp. on review for possible upgrade, following the announcement that Verizon Wireless intends to acquire the company for total consideration of $2.67 billion, including the assumption of debt and preferred.

Moody's said it also affirmed the A3 senior unsecured and P-2 short term ratings of Verizon's majority shareholder, Verizon Communications, Inc.

Moody's noted that it does not maintain ratings on Verizon.

The review of Rural's ratings will focus on Verizon's plans with regard to the existing Rural debt and preferred, Moody's said, adding that it believes that it is highly likely that Verizon will choose to refinance Rural's debt and preferred capital given its high-cost and the existence of significant covenant restrictions.

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