Windstream reduces debt by $335 million via exchange, repurchases

By Wendy Van Sickle

Columbus, Ohio, June 15 – Windstream Holdings, Inc. closed the transfer of about 14.7 million shares of Communications Sales & Leasing common stock to its creditors in a debt-for-equity exchange, according to a press release.

The transferred Communications Sales & Leasing shares, which represented about 50% of Windstream’s total retained stake in Communications Sales & Leasing, were used to retire about $309 million of Windstream’s revolving credit facility debt and satisfy transaction expenses.

Additionally, the company said that since April it has retired $126 million in face value of debt for $100 million in cash funded by its revolving credit facility through open-market debt repurchases.

Through the combined transactions, Windstream has reduced its debt by about $335 million so far in the second quarter.

The company said it now expects cash interest expense of about $375 million for 2016, down from its previous estimate of $385 million.

“This transaction further optimizes our balance sheet,” Bob Gunderman, Windstream chief financial officer, said in the release. “Through open-market debt repurchases and the initial CS&L monetization, we expect to drive an incremental $25 million in cash interest savings in 2017 compared to our revised guidance for 2016.”

After the spinoff of Communications Sales & Leasing in April 2015, Windstream retained about a 20% equity stake in Communications Sales & Leasing.

Following the debt-for-equity exchange transaction, Windstream now holds about 14.7 million shares, or 10%, of Communications Sales & Leasing. Windstream plans to dispose of the remaining shares in the future to further reduce debt and generate cash interest savings.

Windstream is a Little Rock, Ark.-based provider of advanced communications and technology solutions.

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