Yesterday Windstream followed through on the plans it unveiled 9 months ago, and spun off its network assets into a Real Estate Investment Trust in a tax-free move yesterday. The new entity trades under the ticker CSAL, and has had a bit of a rough going while the markets figure out just what to do with it.
Meanwhile, Windstream proper gets to be $4B less in debt than it was, and thanks to a one-for-six reverse split will have a rather higher stock price as well. The company hopes to use the CS&L spinoff not just to save money, but to enable greater investment in its network. The specifics of how that will occur are an open question as yet, one that we will get more color on as the year goes on I assume.
But I think speculation will quickly turn to whether CS&L is able to find additional assets out there to bring into its fold. What happens over the next few quarters will tell us just how attractive the network REIT concept really is to the industry as a whole. Are there ILECs, RLECs, or CLECs out there that would like to do a similar sale/leaseback and would like to share the ride?