Fitch Rates Verizon Communications' Proposed Debt Issue 'A'; Outlook Stable

CHICAGO--(Business Wire)--
Fitch Ratings has assigned an 'A' rating to Verizon Communications, Inc.'s
(Verizon) (NYSE: VZ) proposed offering of $2.5 billion to $3 billion of 10-year
and 30-year senior unsecured notes. The proceeds will be used for the repayment
of commercial paper (CP), the repayment of $1 billion of debt maturing in April
2009, and for general corporate purposes. On March 23, 2009, commercial paper
outstanding approximated $3.4 billion. The Rating Outlook is Stable.

Verizon's 'A' Issuer Default Rating and Stable Rating Outlook reflect the
significant scale and scope of its domestic wireline and wireless businesses,
the high proportion of revenues from wireline and wireless growth areas, and
prospects for continued earnings growth -albeit at a slower pace - in 2009. The
ratings also reflect moderately higher leverage caused by Verizon Wireless'
(VZW) $28.1 billion acquisition of Alltel Corporation (Alltel) in January 2009,
and a return to a leverage profile consistent with the 'A' rating within
approximately a one-year time horizon.

VZ's ratings incorporate the expectation for continued relatively strong growth
at VZW of revenue, EBITDA and free cash flow. In 2008, VZW produced 51% and 62%
of consolidated revenues and EBITDA, respectively. VZW's total wireless revenue
grew 12.4% to $49.3 billion and EBITDA grew 14.5% to $19.4 billion. VZW's simple
free cash flow (EBITDA less capital spending) was strong for 2008 at $12.9
billion, up from $10.4 billion in 2007. Over the next several years, Fitch
expects VZW's contribution to consolidated revenue and EBITDA will increase
materially through continued growth, particularly from wireless data services,
as well as through the Alltel acquisition.

Also an important consideration in Verizon's rating is the access to cash
generated by VZW through intercompany debt repayments initially, and
prospectively through its 55% share of potential distributions. VZW, in which
Vodafone Group Plc (Vodafone) has a 45% stake, currently distributes cash
according to a formula based on revenues and profits for the purpose of
offsetting the taxes on partnership income. As part of the Alltel transaction,
Verizon and Vodafone agreed to an annual review of distributions, and
distributions will be modestly increased in the first two years after the
transaction.

Ongoing concerns include competitive pressures in the residential wireline
market, to which has been added the near-term concern of the effect of the
economic downturn on revenues from the residential and business customer base.
In addition, Fitch believes the economy is likely to slow wireless revenue
growth through continuing pressure on voice average revenue per user (ARPU),
lower take-up rates of wireless data services (which have been growing rapidly)
and lower subscriber growth. There is execution risk regarding the integration
of Alltel, although Fitch notes VZW has a high level of experience in
integrating acquired operations. In the intermediate term, VZW will need to
successfully deploy its fourth-generation wireless network, based on the Long
Term Evolution (LTE) network standard, as well as have new applications
developed (both internally and externally) that use the network. Commercial
launch of the LTE network is expected around 2010 or 2011.

At Dec. 31, 2008, Verizon had $52 billion in total debt outstanding, which
includes a total of $5 billion in commercial paper, bank debt and long-term debt
maturing within one year. Fitch expects Verizon to maintain aggregate CP
balances within a level fully backed by a $5.6 billion credit facility, which
expires in September 2009. The credit facility has no ratings triggers or other
restrictive covenants, such as leverage or interest coverage tests. For 2008,
free cash flow after dividends and capital spending was approximately $4.4
billion, and at Dec. 31, 2008, Verizon had a strong cash position (in
anticipation of closing the Alltel transaction) totaling approximately $9.8
billion.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
John Culver, CFA, 312-368-3216
Bill Densmore, 312-368-3125 (Chicago)
Media Relations:
Cindy Stoller, 212-908-0526 (New York)
cindy.stoller@fitchratings.com

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