Frontier Communications eyes high-yield and secured markets for acquisition financing

By Lisa Kerner

Charlotte, N.C., June 11 – Frontier Communications Corp. chief financial officer John Jureller said the company will be targeting the high-yield unsecured market and will focus on the senior secured bond and bank markets for its latest acquisition financing.

Jureller made his comments during a presentation Wednesday at the Morgan Stanley Leveraged Finance Conference in New Orleans.

Last week, Frontier completed two parts of what Jureller called a three-part financing plan to acquire AT&T, Inc.’s wireline business and fiber network in Connecticut for $2 billion. The deal, announced in December, is expected to close in the fourth quarter, according to Jureller.

Frontier extended its $750 million credit facility to May 2018 from November 2016. The company also entered into a new $350 million senior unsecured delayed draw term loan facility.

While Jureller did not specify plans for the third part of the planned financing, he did talk about a trade-off of “duration versus rate” and “something” in the range of seven to 12 years.

Of the expected $700 million of cash on the balance sheet at year-end, Frontier expects to use $350 million for the Connecticut acquisition after raising $1.9 billion.

Jureller also would not specify a leverage target for the company, but said Frontier is “comfortable” with the net debt-to-EBITDA of just over 3.2 times at the end of the first quarter.

When it comes to capital allocation, Jureller said Frontier wants to invest appropriately in its network, continue to provide a dividend and pay down debt “in the ordinary course.”

Frontier is a telecommunications company based in Stamford, Conn.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.