Fitch affirms CenturyTel, Embarq

Fitch Ratings said it has affirmed the long-term issuer default ratings of CenturyTel, Inc. and Embarq Corp. at BBB-.

The outlook for both companies is stable.

On Oct. 27, CenturyTel and Embarq announced a definitive agreement whereby CenturyTel will acquire Embarq in a tax-free, all-stock transaction, Fitch said, noting that the terms of the transaction call for CenturyTel to exchange 1.37 shares for each Embarq share and the price represents a 36% premium over Embarq's closing stock price on Oct. 24, and an 11% premium over Embarq's average closing stock price during the past 30 trading days.

Leverage, pro forma and before synergies is about 2.3x on an last 12 month basis for Sept. 30, sufficient in Fitch's view to maintain investment grade ratings.

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