S&P rates MCI notes B+

Standard & Poor's said it assigned its B+ corporate credit rating to MCI Inc. A B+ rating also was assigned to the company's aggregate $5.7 billion of senior unsecured notes. The outlook is negative.

S&P said the ratings on MCI reflect intense industry competition and declining pricing for commodity voice and data services because of overcapacity, exacerbated by technological and regulatory shifts.

Weak profitability and negative free cash flow may continue for the foreseeable future because of low double-digit percentage revenue declines largely resulting from MCI's reduced emphasis on the consumer segment, continuing pricing pressure on business customer revenue and higher costs compared with those of peers, according to S&P.

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