confidence on Qwest
Standard & Poor's raises debt ratings, cites strong
By David Milstead
Rocky Mountain News
Friday, June 16, 2006
Ratings agency Standard & Poor's upgraded its rating of
Qwest debt, another milestone in the company's efforts to
repair its balance sheet. S&P raised its short-term rating
on Qwest to B-1 from B-2. The long-term rating is BB-, with
a positive outlook.
The B-1 rating is just two steps away from an
investment-grade rating, prized by companies as a seal of
approval for their creditworthiness. The BB- is three steps
below investment grade.
Ratings below investment grade are commonly called junk,
which is where Qwest's bonds have been rated since the
collapse of the telecom industry that started in 2000.
In a statement, Standard & Poor's credit analyst Catherine
Cosentin said the upgrade "is supported by expectations of
continued strong liquidity and reduced event risk." The
proposed shareholder settlement, in which Qwest plans to pay
$400 to end a class-action lawsuit, "will largely address
many remaining overhang concerns," she said.
In a statement, Qwest spokesman Bob Toevs said, "We are very
pleased with the upgrade from S&P and the recognition of the
progress we've made in improving liquidity, generating
strong free cash flow and turning profitable, as well as our
substantial deleveraging efforts."
Toevs said Qwest's short-term rating with Moody's, an S&P
rival, is SGL-1, Moody's highest junk- bond rating. It was
upgraded from SGL-2 in November 2004.
David Milstead is
finance editor of the Rocky Mountain News. He can be reached
at 303-892-2648 or