S&P rates Verizon commercial paper A-1

Standard & Poor's said it assigned an A-1 short-term rating to the $6 billion 4(2) commercial paper program of Verizon Communications Inc. (A/negative/A-1) following the merger of the company's financing subsidiary Verizon Global Funding Corp. with and into Verizon Communications.

All outstanding debt of Global Funding is now a direct obligation of Verizon Communications.

Verizon Communications' commercial paper program is backed by a $6 billion unsecured revolving credit facility maturing in June 2008, which S&P said is undrawn.

S&P said the ratings on Verizon reflect its strong business position and cash generation in the fast-growing wireless segment, sizable local exchange operations capable of generating substantial free cash flow, a good position serving enterprise customers gained with the January MCI Inc. acquisition and a modest financial risk profile.

These factors are tempered by rising competitive pressure in the mature local exchange segment, primarily from voice-over-Internet protocol telephony services provided by cable TV system operators, the agency said.

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