S&P Cuts Alltel

NEW YORK (AP) – Standard & Poor's Ratings Services said Thursday it lowered its ratings on wireless carrier Alltel Corp. to reflect an expected increase in the wireless carrier's leverage following its private equity buyout.

Alltel's non-investment grade corporate credit rating was lowered to “B+” from “BB.”

The Little Rock, Ark.-based company is being bought out for $24.7 billion by Fort Worth, Texas-based TPG Capital, formerly Texas Pacific Group, and GS Capital Partners, a subsidiary of Goldman Sachs.

Alltel agreed to the buyout in May. The company expects the deal to close by Nov. 22.

Alltel's ratings were removed from CreditWatch, where they were placed with negative implications in February. The ratings outlook is “Negative,” which means the ratings could be reduced again over a long-term period.

On an adjusted basis, the company will have about $24 billion of total debt outstanding.

S&P said the high leverage is partially offset by the company's solid revenue and market position in the wireless services sector.

The ratings service noted that Alltel's capital expenditures continue to total about $1 billion annually as the company increases subscribers, improves its network and adds new data applications.