DUFF & PHELPS: U S WEST COMMUNICATIONS, INC. $484 MILLION 7-1/2 PERCENT DEBENTURES DUE 2023 AND $2 BILLION DEBT SECURITIES (SHELF) RATED 'AA'
CHICAGO, June 4 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `AA' (Double-A) to U S WEST Communications, Inc.'s (USWC) $484 million offering of 7-1/2 percent debentures due June 15, 2023. The debentures are non-callable for 10 years and were priced at 99.221 to yield 7.566 percent. Separately, Duff & Phelps Credit Rating Co. has assigned a rating of `AA' (Double-A) to USWC's shelf registration for $2 billion principal amount of debt securities. Proceeds will be used to refinance higher cost long-term debt and reduce short-term debt balances. On June 1, USWC called for early redemption of 11 long-term debt issues totaling $1.5 billion to take advantage of the currently favorable interest rates. The refinancings are expected to boost net income by $16 million annually. The rating of U S WEST Communications was recently reaffirmed following the announcement that USWC's parent, U S WEST, will invest $2.5 billion in Time Warner Entertainment. USWC has announced plans to upgrade its telecommunications network to provide broadband services over the next two decades. The increase in spending on fiber optic cable and related electronics is expected to be offset by declines in spending on digital switches and other types of equipment. As a result of its commitment to building a state of the art network and its relatively less urban service territory, USWC is well positioned to succeed in the increasingly competitive local exchange telephone business. The strong credit quality of U S WEST Communications is demonstrated by solid pretax coverage of interest expense, substantial funding of construction spending from internal sources and parent infusions of equity to maintain USWC's moderate financial leverage. Duff & Phelps expects modest improvements in measures of financial performance due to operating efficiencies gained as a result of plans to further reduce employees and interest expense savings from the planned refinancing of $1.5 billion of high cost debt. U S WEST Communications, Inc. provides local telecommunications services and access to the networks of long distance carriers to 12.9 million access lines in a fourteen state region in the western United States. The company was formed by the Jan. 1, 1991 merger of Northwestern Bell Telephone Company and Pacific Northwest Bell Telephone Company into Mountain States Telephone and Telegraph Company. -0- 6/4/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/ (USW)
CO: U S WEST Communications, Inc. ST: IN: TLS SU: RTG
WB -- NY050 -- 5537 06/04/93 15:22 EDT
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|Date:||Jun 4, 1993|
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