Fitch Ratings Dwngr Sprint Corp.'s Local Sub Rtgs; Rtg Outlook Stable

Business Wire, Feb 11, 2002

Business Editors

CHICAGO--(BUSINESS WIRE)--Feb. 11, 2002

Fitch Ratings has downgraded the long term debt rating of the following Sprint Corporation operating subsidiaries: Carolina Telephone and Telegraph Company's (CTT) senior debentures downgraded to 'BBB ' from 'A-'; United Telephone Company of Ohio's (UTOH) first mortgage bond downgraded to 'A-' from 'A'; and Sprint Florida, Inc.'s (SFL) first mortgage bond downgraded to 'A-' from 'A'. The Rating Outlook for CTT, UTOH and SFL has been changed to Stable from Negative.

The rating action is in concert with Fitch's recent downgrade of the parent company, Sprint Corporation, whose senior unsecured rating was lowered to 'BBB' from 'BBB ' and reflects the continued integration of the local subsidiaries' operating and capital structures with Sprint Corporation.

Fitch expects the integration between Sprint Corp. and its local subsidiaries to continue into 2002 as Sprint's Local Division focuses on a service bundling strategy to grow revenues. As access line growth is expected to decline during 2002, Sprint's offering of an integrated bundle of local, long distance, wireless, and data services will be critical to maximize revenue generated per local access line. These offerings will require even stronger assimilation of communication networks, billing and customer service platforms.

The local subsidiaries continue to demonstrate strong credit protection metrics, which on a stand-alone basis would support higher credit ratings. The debt to EBITDA measurement for the period ending September 30, 2001 for CTT was 0.8 times, 1.1 times for SFL, and 0.7 times for UTOH. Each local subsidiary continues to exhibit steady EBITDA margins and free cash flow generation.