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SBC's Credit Rating Lowered on Drop in Lines

May 29, 2003|From Bloomberg News

SBC Communications Inc., the largest local-phone service provider in California, had its corporate credit rating lowered one level Wednesday by Standard & Poor's, which cited a 4% drop in customer-access lines last year.

S&P said it reduced the rating to A+, the fifth-highest investment-grade designation, from AA-.

SBC and other Baby Bells have lost millions of local-phone customers to rivals as a result of federal rules that force local carriers to rent their networks to competitors at discounts. S&P also cited obligations to pay pension and other retirement benefits as a reason for the cut.

A spokesman for SBC said he was baffled. "SBC has adopted ultra-conservative financial policies that include dramatically reducing our capital spending ... and increasing our lines of credit," Selim Bingol said.

Shares of San Antonio-based SBC fell 13 cents to $25.32 in New York Stock Exchange trading.

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