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Fitch downgrades Uniti
Fitch Ratings said it downgraded Uniti Group Inc.'s long-term issuer default rating to B+ from BB-.
The outlook was revised to negative from stable.
Fitch also said it downgraded Uniti Group LP's debt, which was previously issued by Uniti Group Inc. and assumed by Uniti Group LP upon the formation of an UP-REIT.
Uniti Group Inc. is a guarantor of the debt.
The downgrades reflect the uncertainty posed by the adverse court decision experienced by its main tentant, Windstream Services, LLC in a bondholder dispute, Fitch said.
As a consequence of that decision, Fitch said it downgraded Windstream to CC.
The immediate impact on Uniti has been to introduce some uncertainty regarding Uniti's ability to access the debt and equity markets at reasonable cost, the agency said.
The ratings reflect a belief that Uniti's operating cash flows are more stable than the operating cash flows at Windstream, Fitch said, as well as the improved revenue diversification Uniti has attained through acquisitions of communications infrastructure since the spin-off from Windstream in 2015.
Although diversification has improved, customer concentration remains high and constrains the issuer default rating, the agency said.
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