With only three days until Frontier (NYSE: FTR) officially takes over Verizon's (NYSE: VZ) rural lines in 14 states, Fitch Ratings has upgraded the service provider's rating.
Fitch said it upgraded Frontier's rating to BB+, the brink of investment-grade territory, because the deal enhances the service provider's size and cash flow.
While Fitch cautioned that near-term merger-related expenses and broadband expansion plans will strain Frontier's cash flow benefits, it felt confident about its long-term cash flow abilities.
Frontier's acquisition of Verizon's rural lines is just one of three transformational deals that have been crafted amongst the three largest remaining independent telcos in the past year. Newly named CenturyLink, which was created through the marriage of the former CenturyTel and Embarq, will once expand its coffers when it completes its acquisition of RBOC Qwest next year.
For more:
- Wall Street Journal via Dow Jones has this article (sub. req.)
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