Fitch Releases 3Q'13 U.S. Telecom & Cable Stats Quarterly Report

Thu Dec 19, 2013 3:33pm EST

(The following statement was released by the rating agency) CHICAGO, December 19 (Fitch) According to a new report issued today by Fitch Ratings, acquisitions totaled $20 billion during third-quarter 2013 (3Q'13), heavily influenced by the closing of Sprint Corporation's (Sprint) merger with SoftBank Corp. and the acquisition of Clearwire Corporation. Merger and acquisition (M&A) activity continued into the fourth quarter as highlighted by Frontier Communications Corp.'s recent announcement that it has entered into a definitive agreement to acquire AT&T Inc.'s wireline operations in Connecticut for $2 billion. As a result of heightened M&A within the industry, few significant opportunities exist for further consolidation. There has been speculation that Sprint is interested in acquiring T-Mobile US, Inc. However, Fitch does not expect this to materialize in the near term as uncertainty as to regulatory approval and spectrum incompatibility persists. As companies pursue M&A activity and prepare for the upcoming wireless spectrum auctions, aggregate leverage increased during 3Q'13 to 2.9x from 2.4x the previous year. American Tower Corporation's leverage increased to 6.3x from 4.6x following the $4.8 billion acquisition in October of MIP Tower Holdings LLC. Verizon Communications Inc. also witnessed leverage increase a full turn to 2.4x after the company issued $49 billion of debt to fund its proposed $130 billion acquisition of Vodafone Group, PLC's 45% interest in Verizon Wireless. Fitch anticipates aggregate leverage will continue to increase slightly into 2014 as total debt levels outpace EBITDA growth. Fitch's 'U.S. Telecom and Cable Stats Quarterly' provides a summary of operating performance, credit metrics, and liquidity positions of the companies in the telecommunications sector of Fitch's rating universe over the past four years, as well as key credit strengths and concerns as of the end of 3Q'13. The full report 'U.S. Telecom & Cable Stats Quarterly - Third-Quarter 2013' is available at 'www.fitchratings.com' or by clicking on the link. Contact: Dave Peterson Senior Director +1-312-368-3177 Fitch Ratings, Inc. 70 W. Madison Street Chicago, IL 60602 Mike Weaver Managing Director +1-312-368-3156 Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: brian.bertsch@fitchratings.com. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: U.S. Telecom and Cable Stats Quarterly (Third-Quarter 2013) here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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 MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.