Printer Friendly

DUFF & PHELPS CREDIT RATING CO. RAISES RATINGS OF MCI COMMUNICATIONS CORPORATION

 CHICAGO, July 16 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has raised the ratings of the long-term debt and commercial paper of MCI Communications Corporation. The rating of MCI's senior debentures and medium-term notes has been raised from "A-" (Single-A-Minus) to "A" (Single-A). MCI's commercial paper rating has been raised from Duff 1- (One Minus) to Duff 1. Additionally, the ratings of MCI's long-term debt remain on the Rating Watch-Favorable.
 These actions have been taken as a result of the announcement that British Telecommunications plc. (BT) will acquire a 20 percent interest in MCI for approximately $4.3 billion in cash. On June 4, 1993, BT purchased $830 million worth of preferred stock convertible into five percent of MCI's common stock. The remaining 15 percent stake will be acquired for an estimated $3.4 billion in approximately one year. At the end of 1992, MCI had total debt outstanding of $3.6 billion.
 With the initial cash infusion from British Telecom, MCI's debt ratio has dropped to just over 40 percent and pretax interest coverage should increase to in excess of 5.0 times. Depending on the final amount of debt reduction and/or the possible investment of the cash into other new ventures, MCI's credit quality could be further enhanced. However, the company has indicated a desire to form a partnership that will offer nationwide wireless personal communications services and has also expressed interest in entering the cable TV industry or the competitive access industry, possibly through an acquisition or a partnership with an existing company in these markets. It will be some time before MCI's future investment strategy is realized. In the interim, we would expect that MCI's debt ratio will remain below historically targeted levels. As a result, the ratings of MCI's debt securities will remain on Rating Watch - Favorable pending final determination of the eventual business and financial risk profile of the company.
 MCI is the second largest long distance company in the United States with approximately 16 percent of the market. The Company provides a wide spectrum of domestic and international voice and data communications services. British Telecom is the world's fourth largest telecommunications company and is principally involved in providing local, long distance, and international telecommunications services in the United Kingdom.
 -0- 7/16/93
 /CONTACT: James J. Stork, CFA, Duff & Phelps Credit Rating Co., 312-368-3125/
 (MCIC)


CO: MCI Communications Corporation; British Telecommunications plc. ST: District of Columbia IN: TLS SU: RTG

LG -- NY023 -- 2435 07/16/93 11:50 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 16, 1993
Words:416
Previous Article:D&P: CONFEDERATION LIFE INSURANCE COMPANY, CONFEDERATION LIFE INSURANCE AND ANNUITY COMPANY CLAIMS PAYING ABILITY RATINGS LOWERED TO 'AA'
Next Article:SPRINT CAPITAL CORPORATION $600 MILLION SHELF REGISTRATION RATED 'BBB' BY DUFF & PHELPS
Topics:


Related Articles
DUFF & PHELPS REAFFIRMS RATINGS OF CENTEL AND CENTEL CAPITAL
DUFF & PHELPS CREDIT RATING CO. ADDSMCI COMMUNICATIONS CORPORATION TO RATING WATCH--FAVORABLE
DUFF & PHELPS: IDB COMMUNICATIONS GROUP, INC. $125 MILLION CONVERTIBLE SUBORDINATED NOTES DUE 2003 RATED 'BBB-'
DUFF & PHELPS RATES U S WEST CAPITAL FUNDING SHELVES
DUFF & PHELPS: MCI COMMUNICATIONS CORPORATION $300 MILLION 6-1/4% NOTES DUE 1999 RATED 'A' $450 MILLION 7-3/4% DEBENTURES DUE 2025 RATED 'A'
DCR Rates MCI Communications' $300 Million Offering 'A'
DCR Places the Ratings of MCI Communications on Rating Watch--Up
DCR Places the Debt Rating of MCI Communications on Rating Watch--Uncertain And WorldCom's Debt Rating on Rating Watch--Up
Duff and Phelps Credit Rating Places GTE Corporation's Debt Ratings on Rating Watch -- Down
DCR Assigns 'A+' Rating to GTE Southwest' Debenture Offering

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters