Blood In The Streets: This 15% Yield From Uniti Is An Opportunistic Buy

Co-produced with Beyond Saving and PendragonY for High Dividend Opportunities.
Introduction
Recently we wrote an article warning investors away from Uniti Group (UNIT) common shares due to the high likelihood of a dividend cut and more issues with their top tenant Windstream (WIN). The fear has created a new opportunity, Uniti Group, 8.25% 15 Oct 2023 bond, Cusip# 20341WAD7 trading at $75. This is an opportunity to earn an 11% yield for over four years. The yield to maturity (which is the standard quote for bond yields) is at 15% today. You can view the bond details by clicking here.
You will notice that the bond is in the name of "COMMUNICATIONS SALES & LEASING INC / CSL" which is the old name for UNITI.
An investment of $10,000 would yield approximately $1,100/year in income and upon maturity would also have 25% upside.
Source
As discussed previously, UNIT has challenges maintaining the dividend coverage. The bond payments on the other hand are well covered by adjusted EBITDA at 2.5x in the most recent 10-Q. The interest expense is approximately $80 million per quarter, and adjusted EBITDA was at $199 million in Q3.
UNIT has been able to grow the adjusted EBITDA, with fiber and non-WIN leasing accounting for a larger portion of it.
Source
Currently, WIN accounts for $692 million of annual adjusted EBITDA. The Bluebird acquisition will add approximately $14 million in annual EBITDA and fiber will continue to increase its role.
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