DBRS New Issue - BellSouth Corporation
DBRS has assigned a rating of A (high)p to BellSouth Corporation’s (“BellSouth” or the “Company”) recently filed $6.95 billion shelf prospectus. The rating remains “Under Review With Negative Implications” given the pending transaction by Cingular Wireless LCC (wholly owned by SBC Communications Inc. and BellSouth) to acquire AT&T Wireless Services Inc. for $41 billion in cash, which is expected to close later in 2004.
BellSouth is expected to utilize this shelf to help fund its proportion of this transaction, which is estimated to be $16 billion. The remaining debt financing that BellSouth requires is now around $5 billion to $6 billion, which has been reduced since the Cingular Wireless LLC/AT&T Wireless Services Inc. transaction was initially announced in February given:
(1) Its cash balance of over $6 billion at June 30, 2004;
(2) AT&T Wireless’ cash balance; and
(3) The pending sale of its Latin American wireless operations to Telefonica Móviles (expected to close during the second half of 2004) for $3.4 billion in cash.