Solid, albeit weakening, position as a provider of local and long-distance telecommunications services in less-competitive rural markets; Modest growth from data services; EBITDA margins of around 40%, which (while solid), are moderately lower than those of peers CenturyLink and Frontier; and Significant competition from cable telephony and wireless substitution, resulting in ongoing access line losses. Our expectation that leverage will be above 5x, pro forma for the future spin-off of a portion of its fiber and copper plant assets into a REIT structure; and Our expectation that the ratio of discretionary cash flow (DCF) to debt, pro forma for the REIT transaction, will be above 5%, supportive of an "aggressive" financial risk profile. The rating outlook is stable, reflecting our
