S&P affirms Citizens Communications

Standard & Poor's said it affirmed its ratings on Citizens Communications Co., including the BB+ corporate credit rating.

The outlook is negative.

All ratings were removed from CreditWatch, where they were placed with negative implications on Sept. 18, the agency said, noting that the CreditWatch placement followed the company's announcement that it had entered into a definitive agreement to acquire Commonwealth Enterprises Inc. for a total of $1.2 billion, including the assumption of $228 million of Commonwealth net debt.

S&P said that the ratings on Citizens reflect a shareholder-oriented financial policy with an aggressive dividend payout and share repurchases, a heightened business risk profile resulting from rising competition from cable telephony and wireless substitution, which have caused access-line losses, integration risk from the acquisition of Commonwealth and longer term risk to regulatory support.

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