U S West Deal Hurts Credit Rating

US West Inc.’s imminent acquisition of Continental Cablevision has led to a drop in the company’s credit rating.

Fitch Investors Service, a major credit-rating agency, on Thursday dropped the company’s rating three levels to BBB-plus, from A-plus.

US West Inc. is the parent company of the regional telephone company US West Communications Inc.

All of the parent company’s debt remains “investment grade,” although Fitch analyst Stephanie Babich noted the downgrade will reduce the number of qualified investors to acquire US West Inc.’s bonds and notes.

Babich said BBB securities are investment grade bonds and the obligator’s ability to repay is considered adequate.

But adverse changes in economic conditions are more likely to have a negative impact on these bonds and impair timely payment, she said.

Babich said that compared with the rest of the nation’s Baby Bells, US West Inc. has a “much lower” credit rating.

BellSouth and Ameritech are the strongest in the AA to AAA category, and in the middle A category are Nynex, Bell Atlantic, Pactel and SBC, she said.