S&P lowers Telephone and Data

Standard & Poor's said it lowered its long-term corporate credit ratings on Telephone and Data Systems Inc. and its 84%-owned operating subsidiary, United States Cellular Corp., to BB+ from BBB-.

The outlook is negative.

At the same time, the agency lowered its issue-level ratings on the company's unsecured debt, including debt at its operating subsidiaries, to BB+ from BBB- and assigned a 3 recovery rating to this debt. The 3 recovery rating indicates an expectation for meaningful (50%-70%) recovery for lenders in the event of a default.

"The rating downgrade reflects our opinion that adjusted leverage will remain above 2x over the next few years, and that FOCF could be negative until 2016 or 2017 due to intense competition and margin pressure at U.S. Cellular," S&P credit analyst Michael Altberg said in a news release.

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