Feb 10 - Standard & Poor's Ratings Services said today that it affirmed its 'BB+' issue-level rating on Little Rock-based incumbent local exchange carrier (ILEC) Windstream Corp.'s amended and restated $2.8 billion senior secured credit facility and assigned its 'BB+' issue-level rating to the company's proposed $280 million senior secured term loan A-3. The recovery rating is '1', which indicates expectations for very high (90%-100%) recovery in the event of payment default. This credit facility amends and restates the term loans in the credit agreement by extending the maturity and resetting the amortization of the existing A-2 tranche while creating a new A-3 tranche. The amended facility will consist of a $1.25 billion revolver, a $172 million term loan A-2 due 2013--a portion of which will be extended to 2016, a $284 million term loan B-1 due 2013, a $1.05 billion term loan B-2 due 2015, and the new $280 million term loan A-3. Our 'BB-' corporate credit rating and stable outlook on Windstream are not affected by the new debt since we expect the company to use the proceeds to repay $280 million outstanding under the revolver; we therefore believe that pro forma leverage of about 3.9x should remain unchanged. (For the complete corporate credit rating rationale, see the research update on Windstream, published Aug. 2, 2011, on RatingsDirect.) The ratings on Windstream reflect an aggressive shareholder-oriented financial policy with a commitment to a substantial common dividend, which limits potential debt reduction; an aggressive acquisition strategy; and a "weak" business risk profile (as defined in our criteria) characterized by competitive pressures from wireless substitution and cable telephony, with resultant ongoing access-line losses. Through a series of acquisitions, the company has also increased its exposure to business segments with even greater competition, including competitive local exchange carriers, which have weak margins and depend on the incumbent local telephone company to provide services. Tempering factors include the company's solid market position as the leading provider of local and long-distance telecommunications services in somewhat less competitive and geographically diverse secondary and tertiary markets, growth from digital subscriber-line (DSL) services, still-healthy EBITDA margins, and solid free operating cash flow. RAITNGS LIST Windstream Corp. Corporate Credit Rating BB-/Stable/-- New Ratings Windstream Corp. $280 mil senior secured term loan A-3 BB+

Recovery Rating 1 Ratings Affirmed Windstream Corp. Senior Secured Amended & extended cred fac BB+ Recovery Rating 1

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