S&P rates Windstream notes B+

Standard & Poor's said it assigned its B+ issue-level rating and 5 recovery rating to Windstream Corp.'s $500 million of senior notes due 2022. The 5 recovery rating indicates an expectation of modest recovery in the event of payment default, the agency said.

At the same time, S&P said it affirmed Windstream's B+ senior unsecured debt rating and removed it from CreditWatch with negative implications, where it was placed on Aug. 2, following the company's announcement that it had agreed to acquire Paetec Holding Corp.

As part of the acquisition, according to an S&P news release, Windstream said it intended to place an unsecured downstream guarantee on Paetec's debt. By removing the B+ issue-level rating from CreditWatch, S&P said it has determined that the guarantee is unlikely to dilute recovery prospects for Windstream's existing unsecured debt sufficiently to result in a one-notch downgrade when the transaction closes. The recovery rating is unchanged at 5.

The BB- corporate credit rating and stable outlook on Windstream are unchanged.

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