Fitch: Windstream's Credit Profile Not Affected by D&E Acquisition

CHICAGO--(Business Wire)--
Fitch Ratings believes Windstream Corporation's (Windstream) proposed
acquisition of D&E Communications, Inc. (D&E) will not have an impact on its
credit profile. Windstream's Issuer Default Rating (IDR) is 'BB+' and the Rating
Outlook is Stable.

Windstream announced a definitive agreement to acquire D&E Communications in a
transaction valued at $330 million. To finance the acquisition, Windstream will
pay $73 million in cash and will issue approximately 9.5 million shares valued
at $86 million based on its May 8, 2009 closing stock price. D&E Communications'
estimated net debt of $171 million comprises the remainder of the transaction
value and consists principally of term loans that may be refinanced. The
transaction will be financed by Windstream's existing cash and the current
capacity on its revolving credit facility.

On a pro forma basis, Fitch believes the transaction has a slightly delevering
effect on Windstream's credit metrics even before anticipated synergies are
taken into account. D&E generated EBITDA of $64 million for the 12 months ended
March 31, 2009, and Windstream anticipates realizing $25 million in annual
synergies in operating expenses and capital expenditures savings following the
integration of D&E.

D&E is a rural local exchange carrier that has approximately 118,000 access
lines and 44,000 customers and is based in Ephrata, Pennsylvania. Based on the
availability of high speed internet access to 100% of its customer base (and
nearly half at 10Mbps [megabits per second]), ongoing capital expenditures are
expected to be reasonable. It also operates in several markets as a competitive
local exchange carrier, and owns six 700MHz wireless licenses in Central
Pennsylvania covering a population approximating 1.3 million. The transaction is
expected to close in the second half of 2009, and is subject to the customary
regulatory approvals and D&E's shareholders.

At March 31, 2009, Windstream had approximately $5.4 billion in outstanding debt
and $312 million in cash and short-term investments. Windstream's $500 million
five-year revolving credit facility had $150 million outstanding at March 31,
2009. The company does not face any significant maturities until 2011 when its
term loan A matures ($283 million outstanding) and the revolving credit facility
expires. During 2009 and 2010, there are approximately $24 million in maturities
annually.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, Chicago
John Culver, CFA, 312-368-3216
Bill Densmore, 312-368-3125
or
Media Relations:
Cindy Stoller, 212-908-0526, New York
Email: cindy.stoller@fitchratings.com

Copyright Business Wire 2009