October 18, 2012 / 6:30 PM / in 6 years

TEXT-S&P: Verizon ratings unchanged by PBO transfer

Oct 18 - Standard & Poor's said today that the ratings and outlook on
Verizon Communications Inc. (A-/Stable/A-2) are not immediately affected
by its announced agreement to transfer $7.5 billion of management retiree
pension benefit obligations to Prudential through an annuity contract. The
transaction, which management expects to close by early December 2012, is
neutral from a credit standpoint, since Verizon will also transfer pension

The company continues to have large aggregate unfunded pension and other 
postretirement benefit obligations (OPEBs), the majority of which relate to 
the OPEBs. This transaction does not include the transfer of any OPEB 
obligations. Verizon's leverage continues to be in the high-2x area, adjusted 
for the after-tax effect of unfunded pension and OPEBs, operating leases, and 
excluding 45% of Cellco Partnership's debt and EBITDA. We do not expect 
leverage to change as a result of this transaction.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below