Moody's gives Uniti Group negative outlook on Windstream ties

|About: Uniti Group Inc. (UNIT)|By:, SA News Editor

Moody's has changed its outlook on Uniti Group (UNIT -0.5%) to negative, after downgrading Windstream Services (WIN -1.4%) to B2 with a negative outlook.

Windstream's facing weak operating trends (and along with that weak EBITDA and cash flow), and it's the largest tenant and main source of revenue for Uniti (about 70% of pro forma revenues).

The probability of default at Uniti is approximately equivalent to that of Windstream, Moody's says, though there are some circumstances where Uniti could avoid a default if Windstream defaults.

Moody's may raise Uniti's ratings if leverage could be sustained under 4x, and the ratings could evolve if Uniti diversifies its revenue base to where the master lease makes up less than 50% of revenue.

Subscribe for full text news in your inbox