Fitch downgrades Windstream Services

Fitch Ratings said it downgraded the issuer default rating of Windstream Services, LLC to D from CC.

The agency also said it downgraded the first-lien secured debt ratings to CCC with recovery rating of RR1 from CCC+ with recovery rating of RR1, second-lien secured debt ratings to CCC with recovery rating of RR1 from CCC+ with recovery rating of RR1.

The company's senior unsecured rating also was revised to C with recovery rating of RR4 from C with recovery rating of RR5.

The actions follow the company's voluntary filing for reorganization under Ch. 11 of the U.S. Bankruptcy Code, Fitch said.

The bankruptcy filing is a result of the adverse court ruling in Windstream's bondholder dispute with Aurelius Capital Management and U.S. Bank NA, giving rise to cross-default provisions contained within the indentures across the company's capital structure, the agency said.

The court found that the spinoff of Windstream's network assets into a REIT, Uniti Group Inc., was invalid, Fitch explained.

The court also found that Windstream violated the terms of the indenture by engaging in an impermissible sale and leaseback transaction, the agency said.

The company is currently examining its options in terms of post-trial motions and an appeal, Fitch noted.

© 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.