S&P rates Sprint notes BB-

Standard & Poor's said it assigned its BB- issue-level rating and 2 recovery rating to Sprint Nextel Corp.'s $2.5 billion of senior guaranteed notes due 2018. The 2 recovery rating indicates expectations for substantial recovery in the event of payment default.

S&P said it also assigned a B+ issue-level rating and 4 recovery rating to the company's $1 billion senior notes due 2021. The 4 recovery rating indicates S&P's expectation for average recovery in the event of payment default.

At the same time, S&P said it revised the recovery rating on Sprint Nextel's existing senior unsecured debt to 4 from 3 although the B+ issue-level rating is unchanged. The corporate credit rating on Sprint Nextel is B+ and remains unchanged, as does the negative outlook.

The rating continues to reflect a "highly leveraged" financial risk profile based on S&P's expectation for free operating cash flow losses through 2013 and operating lease-adjusted leverage increasing to around 6x by 2012.

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