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S&P places MetroPCS on positive watch
Standard & Poor's said it placed MetroPCS Communications Inc.'s ratings on CreditWatch with positive implications following news that the company reached a definitive agreement to combine with T-Mobile USA, a subsidiary of Deutsche Telekom AG.
The CreditWatch placement affects its B+ corporate credit rating, along with the BB rating on MetroPCS Wireless Inc.'s senior credit facilities and the B rating on unsecured notes.
The combination of MetroPCS and T-Mobile USA could result in an improved business risk assessment as a result of larger scale, including greater operating efficiency, better equipment pricing and more spectrum to accommodate the upgrade of the combined network to LTE, S&P said.
MetroPCS currently has a weak business risk based on the potential for pricing volatility and high churn in the prepaid segment in which it operates, the agency said.
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