S&P rates Verizon notes A

Standard & Poor's said it assigned an A rating to Verizon Communications Inc.'s $4 billion offering of four series of notes, including $500 million 5.35% notes due 2011, $1.25 billion 5.55% notes due 2016, $500 million 5.85% notes due 2035 and $1.75 billion floating-rate notes due 2007.

All ratings on Verizon and its subsidiaries, including the A/A-1 corporate credit rating, are affirmed. The outlook remains negative.

Proceeds will be used to repay debt, for general corporate purposes and, potentially, the retirement of a portion of the $5.7 billion of debt assumed with the January acquisition of MCI Inc.

S&P said the ratings on Verizon reflect the strong business position and cash generation of the fast-growing wireless segment, sizable local exchange operations capable of producing substantial free cash flow, a good position serving enterprise customers gained with the MCI 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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