Uniti Earnings: Asset Sales, Secured Financing, and New Windstream Leadership Could Alter Trajectory

Uniti’s third-quarter results were generally in line with our expectations, but the firm’s long-term capital structure continues to take center stage. Management indicated that it is pursuing asset-backed debt financing, similar to what Frontier Communications recently issued. In addition, management sees multiple opportunities to sell or possibly acquire assets. This discussion comes amid the backdrop of a CEO change at Windstream, by far Uniti’s largest customer. We expect Uniti will be able to navigate the capital markets and maintain a reasonably healthy Windstream relationship, and we are not changing our $12 fair value estimate.