S&P: Shaw unaffected

Standard & Poor's said that the ratings and outlook on Shaw Communications Inc. are unaffected by the company's revised policy regarding use of free cash flow.

Shaw announced Thursday that it will increase common dividends and that it expects to increase share repurchases under its normal course issuer bid for the next 12 months.

Previously, S&P said it had expected up to 60% of free cash flow to be applied toward debt reduction; the company is now expected to apply little excess cash to debt reduction in 2005.

Nevertheless, Shaw's credit metrics are expected to continue to strengthen in 2005 and 2006 through EBITDA growth and potential debt reduction in 2006. The outlook remains positive; however, given the revised policy it will take Shaw longer to improve key credit measures to a level that is consistent with an investment-grade rating, S&P said.

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