S&P Places Sprint Nextel (S) Credit Rating On CreditWatch Negative

November 11, 2009 11:35 AM EST

Standard & Poor's it placed its 'BB' corporate credit rating for Sprint Nextel Corp. (NYSE: S), as well as all related issue-level ratings on the company's debt, on CreditWatch with negative implications.

S&P could either lower or affirm the ratings following the completion of its review.

"The CreditWatch listing is based on the company's weak operating performance through the first nine months of 2009, which has resulted in deteriorating credit measures that may no longer be supportive of the current rating," said Standard & Poor's credit analyst Allyn Arden. Total debt to last-12-month EBITDA was 4.4x as of Sept. 30, 2009, and is likely to drift higher given current operating performance. Total revenue and EBITDA declined 9% and 17%, respectively, in the third quarter of 2009 year over year, due to ongoing post-paid subscriber losses, which totaled 801,000 and still elevated churn of 2.2% relative to its peer group."

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