Fitch rates Windstream note BB+

Fitch Ratings said it assigned a BB+ rating to Windstream Corp.'s proposed $500 million offering of senior unsecured notes due 2019.

The outlook is stable.

Proceeds from the offering will be used to repay a portion of the company's senior secured term loan B facility, which currently has $1.9 billion outstanding. The new notes will rank equally with Windstream's existing $2.546 billion of senior unsecured notes.

Concurrent with the refinancing announcement, Windstream disclosed that it will seek the consent of its lenders to amend and restate its senior secured credit facilities to reduce the interest rate on its term loan B facility, modify the prepayment provisions, modify certain covenants to permit the consummation of the anticipated spin off of its directory business and to make other specified changes.

The agency said Windstream's BB+ issuer default rating incorporates expectations for Windstream to generate strong operating cash flow and stable credit-protection metrics, to have access to ample liquidity, to maintain a stable business due to its primarily rural operations and to maintain a debt-to-EBITDA ratio in the 3.2x to 3.3x range over the next few years.

Fitch noted, however, that Windstream will likely experience increased pressure on its revenues and cash flow in 2007 from competition from cable operators for voice services.

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