Moody's rates Qwest notes Baa3

Moody's Investors Service said it assigned a Baa3 (LGD3, 31%) rating to Qwest Corp.'s proposed offering of senior notes due 2053. The outlook is stable.

The proceeds are expected to be used to retire a portion of Qwest's $750 million floating-rate notes due June 15, 2013. As a result of the company addressing this near-term maturity, Moody's raised CenturyLink, Inc.'s speculative grade liquidity rating to SGL-2 from SGL-3.

The agency said CenturyLink's Ba1 corporate family rating reflects the company's stable cash flows, its broad scale of operations and its strong market position.

These positives are offset by the challenges the company faces in reversing the downward pressure on revenues and sustaining EBITDA margins exacerbated by a tolerance for higher leverage, Moody's said.

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