[1st-mile-nm] Windstream Bankruptcy (and Refinancing)

[Richard Lowenberg]

Windstream bankruptcy comes after $310 million court loss against hedge 
fund.

JON BRODKIN - 2/25/2019
https://arstechnica.com/information-technology/2019/02/windstream-isp-with-1-million-customers-files-for-bankruptcy

Windstream—an Internet service provider in mainly rural areas—today 
filed for bankruptcy.

The bankruptcy was spurred by a court ruling from February 15 that could 
cost Windstream hundreds of millions of dollars. The company said the 
bankruptcy will help prevent negative impacts on customers.

Windstream filed petitions for reorganization under Chapter 11 of the 
United States Bankruptcy Code in US Bankruptcy Court for the Southern 
District of New York. Windstream considered other options, including 
appealing the court ruling, but company management and the board of 
directors "determined that filing for voluntary Chapter 11 protection is 
a necessary step to address the financial impact of Judge [Jesse] 
Furman's decision and the impact it would have on consumers and 
businesses across the states in which we operate," Windstream CEO Tony 
Thomas said in the bankruptcy announcement.

Windstream's losing court battle was against hedge fund Aurelius Capital 
Management, "which had argued a two-year-old spinoff of the company's 
fiber-optic cable network violated the covenants on one of its bonds," 
which prohibited "sale-leaseback transactions," The Wall Street Journal 
wrote today.

(Snip)

"Windstream did not arrive in Chapter 11 due to operational failures and 
currently does not anticipate the need to restructure material 
operations,” Thomas also said. "While it is unfortunate that Aurelius 
engaged in these tactics to advance its returns at the expense of 
Windstream, we look forward to working through the financial 
restructuring process to secure a sustainable capital structure so we 
can maintain our strong operational performance and continue serving our 
customers for many years come." Thomas called for government regulation 
of the "unregulated credit default swap marketplace."

The Federal Communications Commission issued a statement on the 
bankruptcy today, saying it's "pleased that Windstream has made clear 
that its reorganization in bankruptcy will not disrupt service to any 
consumers."

Today, Windstream said it has obtained a commitment for $1 billion in 
financing from Citigroup Global Markets. "With approval from the Court, 
we will continue paying our employees, maintaining our relationships 
with our vendors and business partners and serving our customers as 
usual," Thomas said. "We remain committed to providing critical voice 
and data services and ensuring customers realize the maximum benefit in 
transitioning to next-generation technology solutions and premium 
broadband services."

(Snip)

Windstream provides residential service in 18 states, namely Alabama, 
Arkansas, Florida, Georgia, Iowa, Kentucky, Minnesota, Mississippi, 
Missouri, Nebraska, New Mexico, New York, North Carolina, Ohio, 
Oklahoma, Pennsylvania, South Carolina, and Texas.



---------------------------------------------------------------
Richard Lowenberg, Executive Director
1st-Mile Institute     505-603-5200
Box 8001, Santa Fe, NM 87504,
rl at 1st-mile.org     www.1st-mile.org
---------------------------------------------------------------