S&P rates Telephone and Data preferreds B

S&P said it rated Telephone and Data Systems Inc.’s proposed redeemable perpetual series UU preferred shares, amount to be determined, B.

“We classify the preferred shares as having intermediate equity credit (50% equity) based on the proposed terms and rate them three notches below our BB long-term issuer credit rating on the company to reflect their subordination relative to the other debt in the capital structure and the deferability of their dividend payments,” S&P said in a press release.

The company will use the proceeds for general corporate purposes, which the agency said it expects will include funding out-of-territory overbuild opportunities.

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