Fitch lowers Citizens

Fitch Ratings said it downgraded and removed from Rating Watch negative Citizens Communications Co.'s senior unsecured debt to BB from BBB and the rating assigned to Citizens Utilities Trust 5% company obligated mandatorily redeemable convertible preferred securities due 2036 (EPPICs) to BB-.

In addition, Fitch has withdrawn the F2 rating assigned to Citizens' commercial paper as the company has no CP outstanding and has plans to issue commercial paper.

The rating assigned to Electric Lightwave's $6 million of outstanding 6.05% guaranteed notes due 2004 has been downgraded to BB and withdrawn, given its maturity in May 2004.

The outlook is stable.

Fitch had placed Citizens on Rating Watch negative on Dec. 11, 2003 following the company's announcement to consider strategic alternatives.

The rating action follows Citizens' July 11 announcement that it will pay a $2 per common share special dividend to shareholders in September and institute a quarterly dividend of $0.25 per common share beginning in September 2004. The new dividend program also concludes Citizens' review of financial and strategic alternatives.

Fitch said it believes the dividend program is a material negative change for the company from its previous strategy whereby it used free cash flow for debt reduction. Instead, Citizens intends to enhance shareholder value through the delivery of significant levels of cash flow to shareholders.

© 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.