Moody's cuts Alltel view to negative

Moody's Investors Service said it affirmed the A2 long-term and Prime-1 short-term debt ratings of Alltel Corp. and its guaranteed subsidiaries but changed their outlooks to negative from stable.

These rating actions follow Alltel's announcement that it plans to spin off its wireline operations, which will merge with Valor Telecommunications in a reverse Morris Trust transaction and to operate as a standalone wireless company, the agency said.

The affirmation of Alltel's ratings recognizes its strong balance sheet, robust operating metrics, Moody's expectations for improving earnings and cash flows and reflects Moody's belief that the expanded and increasingly dominant rural footprint of Alltel's wireless operations will strengthen the company's position as a roaming partner for the largest wireless providers.

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