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Moody's downgrades CenturyLink to junk
Moody's Investors Service said it downgraded CenturyLink, Inc.'s senior unsecured regular bond/debenture to Ba2 (LGD 5, 85%) from Baa3, its senior unsecured bank credit facility rating to Baa3 (LGD 3, 37%) from Baa3, senior unsecured shelf rating to Ba2 from Baa3 and preferred shelf rating to Ba3 from Ba2.
Moody's also said it downgraded its short-term rating to not-prime from prime-3.
The agency also said it assigned a corporate family rating of Ba1 and a speculative-grade liquidity rating of SGL-4.
The senior unsecured ratings of Embarq Corp. and Qwest Corp. were confirmed at Baa3.
The downgrades reflect an expectation that CenturyLink's debt-to-EBITDA ratio will remain elevated as a result of its decision to abandon its long-standing target debt-to-EBITDA ratio of 2x to to 2.5x and resume share repurchases, the agency said.
The company also announced a 26% reduction in its common stock dividend, Moody's added.
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