S&P: Windstream outlook stable

Standard & Poor's said it revised its outlook on Windstream Corp. to stable from negative and affirmed its ratings, including the BB+ corporate credit rating.

The agency said the outlook revision reflects Windstream's success in mitigating revenue losses related to its declining voice business with growth in internet and data revenues. Its EBITDA margin has also remained stable, at around 50%, because of a continued focus on cost cutting. Additionally, since its 2006 spinoff from Alltel Corp. and its merger with Valor Telecommunications Enterprises LLC, Windstream's management has demonstrated a commitment to maintaining a debt-to-EBITDA ratio in the low- to mid-3x area.

The agency said the ratings on Windstream continue to reflect an aggressive shareholder-oriented financial policy with a commitment to a substantial common dividend that limits potential debt reduction, and the company also faces accelerating competition for voice and data services from cable operators.

Tempering factors include the company's position as the dominant provider of local and long distance telecommunications services in secondary and tertiary markets, markets that have experienced less aggressive cable-based voice-over-internet protocol deployment; Windstream's solid operating margins; and its moderate capital requirements, S&P said.

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