UNIT - Uniti: Can The Pesky Dividend Be Eliminated?
Last we touched on Uniti group (UNIT), we argued that the dividend would likely be cut and that cut would help the bondholders. We thought even in a worst-case bankruptcy renegotiation from Windstream (WIN), UNIT could comfortably cover the interest payments.
Assuming a bombed out 30% reduction in Windstream Lease payments in a renegotiation, UNIT's EBITDA would drop by about 20% (WIN is about 66% of UNIT's revenues), resulting in EBITDA interest coverage moving to about 2X. So a worst case of 2X interest coverage alongside the potential to make 12.5%