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T-Mobile Gets High-Grade Rating From S&P as Merger Risk Fades

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(Bloomberg) -- T-Mobile US Inc. was raised to investment grade by S&P Global Ratings Friday, giving it a blue chip rating from all three major credit graders.

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The No. 2 US wireless carrier was upgraded to BBB- from BB+ by S&P. The ratings firm “believes the credit risk associated with the integration of Sprint continues to abate,” and the credit analysts now expect the company’s debt to earnings before interest, taxes, deprecation and amortization ratio to fall below a ratio of4 this year, according to a statement.

T-Mobile has carried a relatively heavy debt load after relying on bonds over the years to fund purchases of spectrum rights, crucial to building out wireless networks, and for its acquisition of Sprint. But the company has outperformed expectations for integrating with Sprint and increased the amount of money it expects to save from combining the companies, boosting its credit profile.

T-Mobile was upgraded to investment-grade by Moody’s last month, and joins peers AT&T Inc. and Verizon Communications Inc. in the high-grade club.

Last month, the wireless carrier raised its subscriber growth forecast for the second straight quarter, blowing past inflation-related setbacks that ensnared rivals AT&T and Verizon.

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