S&P keeps Windstream notes on watch

Standard & Poor's said it kept its BB- issue-level rating on Windstream Corp.'s existing unsecured notes due 2017 on Creditwatch negative, following the announcement that the company proposes to increase the size of the issue to $1 billion from a $400 million through $600 million add-on offering.

Proceeds will be used to partially fund the pending acquisitions of Iowa Telecommunications Services Inc. and NuVox Corp. and for general corporate purposes, the agency said.

The five recovery rating indicates expectations for modest recovery in the event of payment default, S&P noted, adding that the BB corporate credit rating and all other ratings on Windstream remain unchanged; they are still on Creditwatch with negative implications, based on its concerns regarding the company's aggressive acquisition strategy and its effect on prospective leverage.

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