Moody's may boost Embarq

Moody's Investors Service said it has placed the debt ratings of Embarq Corp. and all of its operating subsidiaries on review for possible upgrade, following the announcement of CenturyTel's (rated Baa2/P-2) plans to acquire the company in a stock-for-stock transaction.

The ratings of CenturyTel remain on review for possible downgrade, the agency said.

Under the terms of the agreement, Embarq shareholders will receive 1.37 CenturyTel shares for each share of Embarq common stock they own, the agency said, adding that the transaction reflects an enterprise value of about $11.6 billion, including the planned assumption of $5.8 billion of Embarq's debt.

The transaction is expected to generate significant synergies, initially estimated by the companies' at about $400 million annually, the agency added.

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