|
|
By Business Wire |
Article Rating: |
|
November 2, 2012 11:55 AM EDT |
Reads: |
579 |
Fitch Ratings has assigned an 'A' rating to Verizon Communications,
Inc.'s (Verizon) (NYSE: VZ) proposed three tranche offering of $4.5
billion of senior unsecured notes. The proceeds will be used to retire
prior to maturity all or a portion of $1.75 billion of debt due in 2013,
$2 billion of debt due in 2018 and to fund a tender offer, contingent
upon completing the offering, for any or all of the $1.25 billion 8.95%
senior unsecured notes due in 2039. Remaining proceeds may be used for
general corporate purposes. The Rating Outlook is Stable.
VZ's ratings are supported by strong free cash flows (FCF) which, in
turn, provide the company flexibility with respect to operating within
its target leverage range of 1.3 times (x)-1.4x. This leverage range is
conservative relative to Fitch's expectations of around 1.5x for the
category. Additional supporting factors include the significant scale
and scope of the company's domestic wireline and wireless businesses and
the high proportion of revenues from wireless and wireline growth areas.
An important component of VZ's ratings is the expectation for continued
relatively strong growth in Verizon Wireless' (VZW) revenue, EBITDA, and
FCF. In the first nine months of 2012, the domestic wireless segment
produced approximately 65% of total consolidated revenues.
Gross leverage for the last 12 months (LTM) ending Sept. 30, 2012 was
1.4x. Consolidated cash balances declined from $13.4 billion at the end
of 2011 to $9.7 billion at Sept. 30, 2012 as VZW paid a $10 billion
dividend in January, of which $4.5 billion was to VZW's 45% owner,
Vodafone Group Plc. The support for the distribution is provided by
VZW's strong FCF generation. Over the LTM ending Sept. 30, 2012, VZW's
simple FCF (EBITDA less capital spending) was approximately $21.5
billion.
The ratings also incorporate Verizon's recently disclosed plans to
contribute $3.4 billion to its pension plans in 2012, $2.1 billion
higher than the company estimated at the beginning of 2012. The new 2012
contribution amount funds the transfer of the company's management
pension plan to Prudential Insurance Company of America as well as
maintains the existing funding percentage with the pension plans that
remain the obligation of Verizon. Through the first nine months of 2012,
Verizon contributed $1.8 billion to its pension plans and expects to
contribute $1.6 billion to the plans during the fourth quarter of 2012.
Concerns include the ongoing competitive pressures in the residential
wireline market from wireless substitution and cable telephony
competition, and the effect of the slow economic recovery on revenues
from business and residential customers.
There is event risk regarding VZ's potential acquisition of Vodafone 45%
interest in VZW, as there would be concerns with regard to its initial
outlay and financing. At the current time, the companies are strongly
committed to the partnership, particularly given the distribution in
early 2012 and expected strong cash flows that would support potential
future distributions.
At Sept. 30, 2012, VZ had $52.8 billion in debt on a consolidated basis.
Of this amount, $6.3 billion matures within one year, or $4.3 billion
pro forma for the make-whole call. VZ's commercial paper (CP) issuances
approximated $2.3 billion and are backed by a $6.2 billion credit
facility, and Fitch expects the company to maintain aggregate CP
balances within a level fully backed by the facility. The credit
facility has no ratings triggers or other restrictive covenants, such as
leverage or interest coverage tests. The three-year facility matures in
August 2016. After the effect of letters of credit (LOCs), approximately
$6.1 billion is available on the facility. On a consolidated basis, VZ
and its subsidiaries have scheduled debt maturities of approximately
$100 million and $5.4 billion in 2012 and 2013, respectively.
In the LTM ending Sept. 30, 2012, FCF after dividends and capital
spending (but prior to the VZW distribution to Vodafone) was
approximately $12.7 billion. In 2012, Fitch expects VZ's FCF (after
capital spending, pension contributions and dividends but prior to
distributions to Vodafone and the acquisition of wireless spectrum) to
be in a $10.5 billion to $11.5 billion range, an increase from the $8
billion generated in 2011. Fitch believes that as FCF continues to grow,
and in the absence of other investment alternatives, the company will
have the flexibility to consider stock repurchases within the context of
maintaining leverage within its 1.3x-1.4x target range.
In 2012, Fitch expects consolidated capital spending to be down slightly
relative to 2011 levels, when spending totaled approximately $16.2
billion. VZ has not provided capital spending guidance by business
segment for 2012. In 2012, key areas of capital spending will consist of
the continued buildout of advanced networks, including the 4G wireless
network and FiOS, well as core network spending on IP and data center
enhancements.
What Could Trigger A Rating Action
A positive rating action could occur if:
--Fitch believes a positive rating action is unlikely, given the
industry's business and technological risks.
A negative rating action could occur if:
--The rating could be negatively affected by heightened wireless
competition. Fitch believes there is a relatively low probability that
VZW's competitive position will become weaker than the wireless industry
as a whole.
Additional information is available at 'www.fitchratings.com'.
The ratings above were solicited by, or on behalf of, the issuer, and
therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (Aug. 8, 2012);
--'Rating Telecom Companies - Sector Credit Factors' (Aug. 9, 2012).
Applicable Criteria and Related Research:
Corporate Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684460
Rating Telecom Companies
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682323
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS
OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF
THIS SITE.

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
@ThingsExpo Stories By Yeshim Deniz  Rodrigo Coutinho is part of OutSystems' founders' team and currently the Head of Product Design. He provides a cross-functional role where he supports Product Management in defining the positioning and direction of the Agile Platform, while at the same time promoting model-based development and new techniques to deliver applications in the cloud. Apr. 24, 2018 01:00 AM EDT Reads: 2,445 | By Pat Romanski  Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage. Apr. 23, 2018 11:15 PM EDT Reads: 2,828 | By Elizabeth White  IoT is rapidly becoming mainstream as more and more investments are made into the platforms and technology. As this movement continues to expand and gain momentum it creates a massive wall of noise that can be difficult to sift through. Unfortunately, this inevitably makes IoT less approachable for people to get started with and can hamper efforts to integrate this key technology into your own portfolio. There are so many connected products already in place today with many hundreds more on the h... Apr. 23, 2018 11:00 PM EDT Reads: 1,177 | By Elizabeth White  In his session at Cloud Expo, Alan Winters, U.S. Head of Business Development at MobiDev, presented a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses:
The smart choice, or how to select the right offshore development partner
Warning signs, or how to minimize chances of making the wrong choice
Collaboration, or how to establish the most effective work processes
Budget control, or how to maximize project result... Apr. 23, 2018 11:00 PM EDT Reads: 6,443 | By Liz McMillan  Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abilit... Apr. 23, 2018 10:30 PM EDT Reads: 17,458 | By Liz McMillan  Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value.
In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine. Apr. 23, 2018 09:45 PM EDT Reads: 22,667 | By Yeshim Deniz  In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c... Apr. 23, 2018 09:45 PM EDT Reads: 6,873 | By Elizabeth White  No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec... Apr. 23, 2018 07:00 PM EDT Reads: 6,045 | By Liz McMillan  In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settl... Apr. 23, 2018 07:00 PM EDT Reads: 13,686 | By Elizabeth White  In his session at @ThingsExpo, Dr. Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, presented the findings of a series of six detailed case studies of how large corporations are implementing IoT. The session explored how IoT has improved their economic performance, had major impacts on business models and resulted in impressive ROIs. The companies covered span manufacturing and services firms. He also explored servicification, how manufacturing firms shift from se... Apr. 23, 2018 05:45 PM EDT Reads: 5,879 | By Elizabeth White  IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app... Apr. 23, 2018 05:30 PM EDT Reads: 7,493 | By Pat Romanski  Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now. Apr. 23, 2018 04:15 PM EDT Reads: 7,072 | By Pat Romanski  Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on... Apr. 23, 2018 02:45 PM EDT Reads: 1,487 | By Liz McMillan  The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc... Apr. 23, 2018 02:15 PM EDT Reads: 1,814 | By Elizabeth White  DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide. Apr. 23, 2018 01:30 PM EDT Reads: 1,848 | By Elizabeth White  "Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Apr. 23, 2018 01:15 PM EDT Reads: 4,150 | By Yeshim Deniz  JETRO showcased Japan Digital Transformation Pavilion at SYS-CON's 21st International Cloud Expo® at the Santa Clara Convention Center in Santa Clara, CA. The Japan External Trade Organization (JETRO) is a non-profit organization that provides business support services to companies expanding to Japan. With the support of JETRO's dedicated staff, clients can incorporate their business; receive visa, immigration, and HR support; find dedicated office space; identify local government subsidies; get... Apr. 23, 2018 01:15 PM EDT Reads: 2,137 | By Liz McMillan  "We view the cloud not as a specific technology but as a way of doing business and that way of doing business is transforming the way software, infrastructure and services are being delivered to business," explained Matthew Rosen, CEO and Director at Fusion, in this SYS-CON.tv interview at 18th Cloud Expo (http://www.CloudComputingExpo.com), held June 7-9 at the Javits Center in New York City, NY. Apr. 23, 2018 12:00 PM EDT Reads: 13,304 | By Pat Romanski  DXWorldEXPO LLC announced today that the upcoming DXWorldEXPO | CloudEXPO New York event will feature 10 companies from Poland to participate at the "Poland Digital Transformation Pavilion" on November 12-13, 2018. Apr. 23, 2018 12:00 PM EDT Reads: 2,437 | By Liz McMillan  The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to... Apr. 23, 2018 12:00 PM EDT Reads: 5,311 |
|
|
|
|
|
|