Huge debt from Vodafone deal causes Verizon’s rating to fall

 
Oliver Smith
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SINCE Monday’s announcement of a groundbreaking $130bn (£84bn) sale between Verizon and Vodafone, Verizon has seen its debt rating downgraded and share price slump.

Moody’s yesterday downgraded Verizon’s long term debt to Baa1 from A3 citing the additional $67bn of new debt that the telecoms firm added from the Vodafone deal, almost doubling the telecoms company’s debt load to $116bn.

Shares in Verizon fell five per cent in Tuesday’s trading, from their close last week of $47.2 a share, before recovering somewhat to $46.6 a share yesterday.

Following Monday’s announcement of the Vodafone deal executives from Verizon said they hoped to pay down the debt from the deal “as quickly as possible,” with the hope of returning Verizon to its previous debt rating in four to five years.