S&P: Sprint, Nextel remain on watch

Standard & Poor's said its ratings on Sprint Corp. (BBB-/Watch Positive/--) and Nextel Communications Inc. (BB+/Watch Positive/--) remain on CreditWatch positive following the announcement of the proposed merger of the two companies.

On watch are Sprint's BBB- corporate credit rating and senior unsecured debt rating, Nextel Communications Inc.'s BB+ corporate credit rating, BB senior unsecured debt rating and B+ preferred stock rating and Nextel Finance Co.'s BB+ corporate credit rating and secured bank loan rating.

The ratings on Sprint were initially placed on CreditWatch on Oct. 8 based on the company's steady wireless operating and financial improvement. The Nextel ratings were initially placed on CreditWatch on Oct. 27 based on strong operating momentum and strengthening credit measures.

S&P said Nextel's operating momentum remains strong, supported by the company's differentiated push-to-talk product and captive subscriber base.

Sprint's wireless service revenues rose 11.9% in the third quarter year over year, driven by 11.8% subscriber growth and flat $63 ARPU, according to S&P.

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