US West Inc has got the all-clear from Moody’s Investors Service Inc for its plan to spend $1,200m on those cable properties in Atlanta (page four). Moody’s confirmed the ratings on the long-term debt of US West and its supported subsidiaries based on its expectation that the company’s acquisition of the cable television properties in the Atlanta metropolitan area will include a financing plan with sufficient common equity to offset the increase in business risk being absorbed. About $3,500m of debt is affected. The convertible subordinated debentures issued by US West Inc are rated A3; senior notes and medium-term note programme issued by US West Capital Funding, rated A2 and shelf registration, rated (P)A2; medium-term note programme issued by US West Financial Services Inc, rated A2 and commercial paper borrowings by Capital Funding, rated Prime-1. With the decision to expand its interests in broadband networks, US West is positioning itself to take advantage of the accelerating convergence of the communications, video entertainment, information services markets and the ability of various distribution technologies, whether wireline or wireless, to provide service, the agency reckons. Although the long-term revenue potential of this developing environment is significant, Moody’s said that it is in keeping with the higher risk of a highly competitive market. The rating agency said it believes that the company shares this view and, reflecting the commitment to sustain credit quality, will issue sufficient common equity to balance those risks.
