New Hampshire utility regulators have taken the unusual step of scheduling a hearing for Sunday afternoon to consider possible changes in their approval of the sale of Verizon's telephone lines in northern New England to FairPoint Communications.

The sale is due to close Monday by midnight.

An announcement of the weekend hearing in New Hampshire came this afternoon, soon after Maine utility regulators declined to alter conditions in their approval of the sale, despite news of an unanticipated, multi-million dollar rise in FairPoint’s debt.

In Maine, the Public Utilities Commission held an unusual special session after learning this week that the interest rate on $551 million in bonds being issued to help finance the sale is much higher than FairPoint’s earlier projections.

The matter is important because FairPoint already is assuming high levels of debt to make the $2.4 billion transaction possible. Regulators have ongoing concerns that ratepayers could eventually be at risk, if FairPoint is unable to reduce the debt level in future years.

During questioning, Walter Leach, a FairPoint vice president, said current conditions in the credit markets, including the recent collapse of the Bear Stearns investment bank, made it impossible to sell bonds at the lower rates projected earlier this month. These developments surprised the company and bond underwriters, he said.

Asked if delaying the sale date might lead to more favorable rates, Leach responded that the closing date already has been pushed back three months. Any further hold-up would kill the sale, he said. FairPoint has hired many additional employees in anticipation taking over Verizon’s phone network, he noted, and can’t continue to support the expenses without revenue from Verizon’s customers.

After deliberating, the three commission members decided that, despite the added risk, ratepayers would still be better off with allowing the sale to proceed. They decided to take no action.

Attention now turns to New Hampshire's PUC.