S&P: Windstream on watch

Standard & Poor's said it placed its BB+ corporate credit rating and all other ratings on Windstream Corp. on Creditwatch with negative implications.

The Creditwatch listing follows the company's announcement that it has signed a definitive agreement to acquire NuVox Inc. (B/watch positive) in a transaction valued at about $643 million consisting of $183 million of stock, $280 million of cash and the assumption of $180 million of net debt, the agency said.

According to S&P, Windstream intends to finance the acquisition with existing cash and capacity under the $500 senior secured revolver.

"Given Windstream's already heightened leverage of about 3.6x," said S&P credit analyst Allyn Arden, "the addition of NuVox creates an incrementally weaker overall business risk profile that may no longer support the current BB+ corporate credit rating."

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