Moody's may up MCI, may cut Verizon

Moody's Investors Service said it placed the long- and short-term debt ratings of Verizon Communications Inc. and the long-term ratings of its telephone subsidiaries' on review for possible downgrade based on the company's plan to acquire MCI for about $8.9 billion in cash, stock and assumed debt.

At the same time, Moody's affirmed the A3 senior rating on Verizon Wireless, while changing its outlook to stable from positive.

In addition, Moody's placed the long-term ratings of MCI on review for possible upgrade.

On review for downgrade are Verizon Global Funding's A2 senior unsecured and prime-1 short-term ratings, Verizon Network Funding's prime-1 short-term, GTE Corp.'s A3 senior unsecured rating, NYNEX Corp.'s A2 senior unsecured rating, GTE Southwest's A1 first-mortgage bonds, A2 notes and debentures, Verizon California's A1 debentures, Verizon Delaware's Aa3 debentures, Verizon Florida's A1 debentures, Verizon Maryland's Aa3 debentures, Verizon New England's A2 debentures, Verizon New York's Baa2 notes and debentures, Verizon North's Aa3 first-mortgage bonds and A1 debentures, Verizon Northwest's A1 debentures, Verizon South's A2 debentures, Verizon Virginia's Aa3 debentures and notes and Verizon West Virginia's and Washington D.C.'s Aa3 debentures.

On review for upgrade are MCI's B2 senior implied and senior unsecured ratings and B3 issuer rating.

Moody's said its review for possible upgrade of MCI will focus on Verizon's plans for MCI's debt upon completion of the merger.

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