S&P: Windstream outlook negative

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

The agency said the outlook revision reflects Windstream's modestly weaker credit protection measures, primarily as a result of losses in market value of the company's pension plan assets. Given the secular decline for rural local exchange carriers, S&P said it could lower the rating if leverage does not return to the low 3 times area over the next year from its current 3.5 times level.

The BB+ rating continues to reflect an aggressive shareholder-oriented financial policy, high leverage, increasing competition from wireless substitution and cable telephony and modestly declining revenues from mature local telephone business, the agency said.

Tempering factors include the company's position as the leading provider of local and long-distance telecommunications services in less competitive and geographically diverse secondary and tertiary markets, growth from digital subscriber line services, still healthy EBITDA margins and solid free operating cash flow, S&P said.

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