S&P Affirms SBC Rating

Communications Today, July 9, 2002

Credit rating agency Standard & Poor's said its rating and outlook for SBC Communications [SBC] won't be affected by the company's recent deal to sell its 4 percent stake in Bell Canada Holdings to BCE [BCE] for $870 million. S&P said the telephone giant's rating will remain at "AA-/Stable/A-1 ".

SBC's agreement with BCE also gives SBC the right to sell its remaining 16 percent interest in BCHI to BCE beginning in 2003. The agency said it expects "on-going competitive pressures and economic weakness" to continue to limit SBC's revenue and operating cash flow growth for the rest of this year.

In April, SBC posted its first quarterly loss in nearly five years, and said it might miss this year's revenue forecasts.