S&P affirms Telephone & Data Systems, U.S. Cellular

Standard & Poor's said it affirmed the ratings on Telephone & Data Systems Inc. and 80%-owned subsidiary United States Cellular Corp., including the BB+ corporate credit ratings and removed them from CreditWatch.

The outlook is developing.

According to S&P, the ratings were initially lowered and placed on CreditWatch with negative implications on Nov. 7, 2006, after Telephone & Data Systems said it would restate its financial results for the years 2002 through 2005, as well as quarterly information for 2004 and the first half of 2006.

The rating is severely weakened by the company's internal control shortfalls, S&P said, adding that these weaknesses resulted in delays in the company's financial reporting in the past 18 months and a need for repeated waivers from certain lenders and credit counterparties.

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