S&P shifts Verizon view to stable

S&P said it changed the outlook for Verizon Communications Inc. to stable from positive and affirmed all its ratings, including the BBB+ senior unsecured notes rating.

“The outlook revision reflects the increase in leverage due to the purchase of spectrum licenses in the C-Band auction. Despite Verizon's commitment and actions taken to reduce debt over the past several years, the estimated total $53 billion spending in the C-Band auction will increase leverage to about 3.2x in 2021, while higher levels of capital spending could reasonably be expected in the near term to support the rapid buildout to deploy these strategically important licenses as well as fiber deployments, which all together could keep leverage at about 3x through 2023,” S&P said in a press release.

As a result, S&P said it does not see Verizon lowering its 2.5x threshold for an upgrade until 2024 or 2025, but it does forecast leverage to be about 3x by 2023 “comfortably below our 3.25x downgrade threshold.”

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