S&P may cut some Verizon unit debt

Standard & Poor's said it placed the A ratings on three unsecured debt issues at two of Verizon Communications Inc.'s subsidiaries on CreditWatch with negative implications.

Verizon's A corporate credit and A-1 commercial paper ratings were affirmed.

The outlook is negative.

The actions follow the company's announced definitive agreement with Frontier Communications Corp. (BB/stable) to spin off about 4.8 million access lines in 14 states in a tax-free transaction valued at $8.6 billion, to be acquired by Frontier, according to the agency.

"When the transaction with Frontier is completed, which we expect to occur by mid-2010, subject to regulatory and board approvals, we will lower the A rated debt at Verizon North and Verizon West Virginia to reflect the lower corporate credit rating on Frontier," S&P analyst Catherine Cosentino said in a statement.

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