Moody’s rates Verizon notes Baa1

Moody's Investors Service said it assigned Baa1 ratings to Verizon Communications Inc.'s newly issued senior unsecured notes due 2022, 2027, 2037 and 2047.

Verizon intends to use the net proceeds to repurchase notes tendered in its concurrent tender offers and for general corporate purposes, including the refinancing other debt, financing, in whole or in part, of Verizon's pending acquisition of Yahoo! Inc. and discretionary contributions to its qualified pension plans.

“The incremental debt financing will result in modest, if any, upward pressure on Verizon's leverage on a Moody's adjusted basis,” the agency said in a news release.

“The tender offer will result in incremental debt only to the extent that existing debt is tendered for amounts above par, net of tax benefits. Any debt raised to fund Verizon's pension deficit will be neutral to Moody's adjusted debt, and will generate a favorable tax benefit.

“Lastly, the Yahoo transaction will include an acquired EBITDA stream and the financing will be offset by the proceeds from Verizon's recently announced data center sale expected to close in 2017,” Moody’s added in the release.

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