Printer Friendly

MCI COMMUNICATIONS $1.5 BILLION SENIOR NOTES, DEBENTURES RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, April 1 /PRNewswire/ -- MCI Communications Corp.'s $1.5 billion senior notes and debentures are rated 'A-' by Fitch. MCI's $427 million subordinated debentures and convertible notes are rated 'BBB+' and its commercial paper program is rated 'F-1'. The credit trend is improving.
 The ratings reflect MCI's prospects for sustaining solid growth, its strong financial performance, and exceptional cash flow. Through an aggressive and innovative marketing effort, MCI generated revenue growth of more than 11 percent in 1992, well above the industry average. This growth gave MCI almost an 18 percent market share in the long distance industry, versus AT&T's 65 percent share.
 The 'F-1' commercial paper rating reflects MCI's improving financial performance, strong cash flows, and solid access to ample liquidity. The company's $1.25 billion renewable revolving credit agreement represents a strong and reliable source of liquidity to support CP borrowings. The rating also is supported by further evidence of MCI's financial strength, including its ability to generate operating cash flows well in excess of its total authorized commercial paper program, and its highly liquid working assets. MCI's accounts receivables, as an additional potential source of alternative funding, represent an important asset and further evidence of the company's financial strength.
 Importantly, MCI achieved its revenue growth while holding down costs. The growth in sales and marketing costs has been held well below the 1992 industry average. As a result, MCI's earnings, as measured by return on average equity, were more than 21 percent in 1992.
 The company's exceptional cash flows, coupled with a stable capital program, allowed MCI to reduce leverage to about 53.7 percent of total capitalization at year-end 1992 from over 67 percent in 1988. Although Fitch expects some increase in the capital program in 1993, MCI should reduce capital spending in 1994 and 1995. Pretax interest coverage was more than 5.5 times in 1992.
 The expansion of MCI's Friends & Family Program, offering discounts to frequently called numbers, helped boost the company's traffic volume to almost twice the industry average last year. While growth may moderate in the residential customer base, Fitch expects MCI's overall traffic growth to benefit this year and next from the Federal Communications Commission decision to allow 800 number customers to change carriers.
 Fitch expects that MCI will continue to focus its efforts on sustaining profitability through cost reduction measures. Access costs -- the largest component of operating costs -- may be reduced through the use of alternative access providers. There is also evidence that sales and marketing expenditures have stabilized industry-wide, a development that will help MCI maintain strong profit margins. While MCI continues to explore opportunities for selective expansion into high-growth communications markets, Fitch expects the company to consider partnerships and joint ventures to reduce the impact on overall credit quality.
 -0- 4/1/93
 /CONTACT: Timothy Cain of Fitch, 212-908-0587/
 (MCIC)


CO: MCI Communications Corp. ST: District of Columbia IN: TLS SU: RTG

PS -- NY052 -- 2000 04/01/93 11:44 EST
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:Apr 1, 1993
Words:496
Previous Article:CATERPILLAR INC. ANNOUNCES IT WILL REDEEM DEBENTURES
Next Article:IBM OS/2 2.0 CELEBRATES FIRST ANNIVERSARY
Topics:


Related Articles
FITCH WITHDRAWS RATINGS OF EIGHT BANK AND FINANCE COMPANIES -- FITCH FINANCIAL WIRE --
PUGET SOUND P&L $450 MILLION NOTE PROGRAM RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
PUGET SOUND P&L $450 MILLION NOTE PROGRAM RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
LONG DISTANCE CREDIT QUALITY SOLID ACCORDING TO FITCH -- FITCH FINANCIAL WIRE --
MCI DEBT REMAINS ON FITCHALERT POSITIVE AFTER ANNOUNCEMENT -- FITCH FINANCIAL WIRE --
MCI 'A-' SENIOR DEBT RATINGS REMAIN ON FITCHALERT POSITIVE -- FITCH FINANCIAL WIRE --
MCI PROPOSED $750 MILLION QUIPS RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
LOCKHEED MARTIN $3.5 BILLION DEBT SECURITIES RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --
MCI COMMUNICATIONS $500 MILLION SENIOR DEBENTURES RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --
MCI Communications $300M Senior Notes Rated 'A' by Fitch -- Fitch Financial Wire --

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