Moody's rates Verizon Wireless A2

Moody's Investors Service said it assigned an issuer rating of A2 to Cellco Partnership, doing business as Verizon Wireless, in connection with the company's plans to issue debt to finance its planned acquisition of Alltel Corp. for $28.1 billion.

The outlook is negative.

The A2 issuer rating reflects significant scale, industry-leading operating performance and solid free cash flow generation that should allow the Company to deleverage quickly following the acquisition, the agency said.

The company is expected to benefit from economies of scale, the high operating leverage inherent in its business model and synergies resulting from its acquisition of Alltel, the agency noted.

The A2 rating assumes the company will achieve a debt-to-EBITDA ratio of 1x by the end of 2010.

The rating is tempered by our expectation for slower revenue growth as market penetration heads toward 100% and consumer spending weakens, an intensely competitive marketplace and by the fact that Verizon Communications is heavily dependent on cash flows from Verizon Wireless, the agency said.

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