Moody's ups Sprint outlook

Moody's Investors Service raised the outlook on Sprint Corp. and subsidiary long-term debt to stable from negative.

The ratings were affirmed, including Sprint's senior unsecured debt at Baa3.

The evolution from negative to solidly positive free cash flow, debt reduction, better operational issues as PCS monthly churn has trended below 3.0% after peaking at 3.8% in the third quarter of 2002 and improved liquidity were cited as reasons for the upgraded outlook, Moody's said.

Ratings reflect significant and stable cash flows, expectations of continued revenue growth and margin improvement at the PCS Group, successful cost containment at the long distance unit, a solid liquidity profile and continued debt reduction.

Notably, the rating also is based on Moody's expectation that Sprint will not elect to contribute capital to support its PCS affiliates, two of which are currently in bankruptcy or in default of their debt, and that there is a low probability that all the affiliates will be able to successfully force Sprint to purchase their businesses.

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