S&P: Alaska Communications on watch

Standard & Poor's said it placed its ratings for Alaska Communications Systems Group Inc. and Alaska Communications Systems Holdings Inc., including the B+ corporate credit rating, on credit watch with negative implications.

S&P said the action is based on concerns that financial risk will increase following the proposed sale of $400 million in income deposit securities, exacerbated by ongoing competitive pressure.

At the current rating level, S&P considers Alaska Communications Systems' cash important in weathering the very competitive Alaska telecommunications market.

S&P said notwithstanding new management efforts and initial positive results, the likelihood of further operating improvement and its longer-term sustainability remain uncertain.

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