Moody's ups Alltel notes to Baa1

Moody's Investors Service said it upgraded to Baa1 from Caa1 (LGD6, 95%) $2.3 billion of senior unsecured legacy debt at Alltel Corp. and $1 billion pay-in-kind toggle notes issued by wholly owned subsidiary Alltel Communications, Inc.

The agency said it confirmed Alltel's other non-legacy debt instruments based on the expectation that they will be redeemed in full at closing.

The upgrade reflects the view that the acquisition of Alltel by Verizon Wireless will materially enhance Alltel's standalone credit profile despite the lack of guarantees from Verizon, according to the agency.

Moody's said it believes that Verizon will support its subsidiary AirTouch Cellular, which will own Alltel's acquired assets, due to their strategic importance to Verizon's wireless operations and significant long-term opportunities to improve cash flow through cost synergies and the enhanced operating scale of the combined companies.

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