Fitch rates Windstream DIP loans BBB-

Fitch Ratings said it assigned a BBB- rating to the $1 billion debtor-in-possession revolving credit and term loan facility of Windstream Services, LLC.

The BBB- rating is supported by the strong over-collateralization of the fully utilized revolving credit and term loan facility, Fitch said.

The agency said it estimates a collateral value of about $5.6 billion, which provides 5.6x coverage of the fully drawn DIP facility.

The collateral package is comprehensive and consists of a priming first-lien on substantially all assets, Fitch said.

The overcollateralization of the DIP facility is the most important rating driver and carries significant weight in the issue rating, the agency explained.

A $6 billion enterprise value was estimated by applying a 5x multiple to a going concern EBITDA assumption of $1.2 billion, which is slightly less than the base case forecast for EBITDA in 2020, Fitch said.

The agency said it anticipates the company will emerge as a going-concern and continue to operate.

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