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Moody's affirms Windstream
Moody's Investors Service said it affirmed Windstream Corp.'s Ba2 corporate family rating, Ba3 (LGD5, 75%) note ratings and SGL-1 speculative-grade liquidity rating following the company's announcement that it will buy back up to $400 million in stock over the next 24 months.
The outlook remains stable.
Windstream expects to fund the buyback with available free cash flow, although it may use its revolving credit facility to bridge the free cash flow timing. The agency expects the company's overall credit profile to remain stable, driven by improvements in its cost structure.
The Ba2 corporate family rating reflects Windstream's high debt levels and the expected downward pressure on wireline revenue and cash flow growth in the future, Moody's said. Due to the company's high dividend payments, cash flows available for debt reduction are likely to remain below 2% of total debt in the next two years, and the agency does not expect debt to decline below 3.5 times EBITDA by the end of 2009.
The ratings and the outlook benefit from the stability of the company's operations and management's track record of delivering on expected results, Moody's added.
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