Windstream Market Cap Plummets Following Court Ruling

One of the nation's largest telecom carriers is stuck between a gloating hedge fund and a pile of debt.

Phil Harvey, Editor-in-Chief

February 19, 2019

2 Min Read
Windstream Market Cap Plummets Following Court Ruling

Shares of telecom carrier Windstream fell $2.06 (-61.13%) to $1.31 as investors ran away from the company following a federal judge's decision in favor of its bondholders.

The hedge fund Aurelius Capital Management, a major holder of Windstream bonds, said that Windstream violated the condition of its bonds when, in 2015, it spun off its Windstream Services subsidiary into a real estate investment trust (REIT) called Uniti Group.

Windstream's market capitalization was $144.7 million as of the afternoon of Friday, February 15, and had fallen to $56.3 million by the close of business on Tuesday, February 19.

The hedge fund really rubbed it in when it issued a response to Windstream management on Tuesday.

"According to its statement last Friday, Windstream now intends to appeal," the bondholder wrote. "This is welcome news for our fund, as it will require Windstream to post a surety bond exceeding $300 million. That surety bond will pay in full the notes our fund owns when Windstream loses the appeal. We are happy to take the surety company's credit over Windstream's."

Then the hedge fund flipped off the other Windstream debt holders. "To noteholders who chose to play the company's game even after it had broken its promise, we wish you luck with your exchange notes," the company said in its statement. "Between their dubious status and their OID [original issue discount] risk in bankruptcy, we suspect you will need it."

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Phil Harvey, US Bureau Chief, Light Reading

About the Author(s)

Phil Harvey

Editor-in-Chief, Light Reading

Phil Harvey has been a Light Reading writer and editor for more than 18 years combined. He began his second tour as the site's chief editor in April 2020.

His interest in speed and scale means he often covers optical networking and the foundational technologies powering the modern Internet.

Harvey covered networking, Internet infrastructure and dot-com mania in the late 90s for Silicon Valley magazines like UPSIDE and Red Herring before joining Light Reading (for the first time) in late 2000.

After moving to the Republic of Texas, Harvey spent eight years as a contributing tech writer for D CEO magazine, producing columns about tech advances in everything from supercomputing to cellphone recycling.

Harvey is an avid photographer and camera collector – if you accept that compulsive shopping and "collecting" are the same.

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