Qwest Rating Cut to ‘Junk’ by Moody’s
Qwest Communications International Inc.’s ratings were cut to “junk” status by Moody’s Investors Service, which said the No. 4 U.S. local phone company has too much debt and may face a cash crunch if it does not sell assets quickly.
The downgrade affects $26.4billion of debt and comes as Qwest, which is trying to avoid violating a bank covenant, markets its phone book business, QwestDex Yellow Pages, for up to $10billion.
Moody’s cut the senior debt of Qwest and its Qwest Capital Funding unit two notches to Ba2, its second-highest junk grade, from Baa3, its lowest investment grade.
Qwest shares rose 14 cents to $5.20 on the New York Stock Exchange.
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