S&P lowers Windstream

S&P said it lowered the issuer credit rating on Windstream Holdings Inc., Windstream Georgia Communications Corp. and Windstream Holding of the Midwest Inc. to CCC- from CCC+ based on heightened risk of default.

The heightened default risk follows a judge's recent ruling that Windstream Services breached the indenture governing its 6 3/8% senior notes due 2023 through the spin-off of a portion of its fiber and copper plant to Uniti Group Inc. in 2015, the agency explained.

S&P also said it lowered the ratings on the first-lien debt of subsidiaries Windstream Services LLC and Windstream Holdings of the Midwest Inc. to CCC+ from B.

The agency also lowered the ratings on Windstream's second-lien notes to CC from CCC and its senior unsecured notes to C from CCC-.

S&P said it could lower the issue-level rating on the 6 3/8% senior notes due 2023 to D over the medium term depending on the outcome of potential post-trial motions.

The negative outlook reflects heightened liquidity risks stemming from the $310 million now due to Aurelius, along with the increased likelihood that Windstream's creditors will seek immediate repayment of its debt, which could force the company into a comprehensive restructuring or bankruptcy.

The negative outlook also considers a view that Windstream faces a higher risk of default following the ruling, although the timing and ultimate resolution remains highly uncertain because of a possible stay on the amounts owed, along with an appeal.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.