Rural broadband and satellite TV provider Frontier Communications has secured the US$1.9bn bridge term loan that will fund its US$2bn cash acquisition of US telecoms incumbent AT&T’s fixed-line business in Connecticut.
The facility matures on 16…
Rural broadband and satellite TV provider Frontier Communications has secured the US$1.9bn bridge term loan that will fund its US$2bn cash acquisition of US telecoms incumbent AT&T’s fixed-line business in Connecticut.
The facility matures on 16 December 2014 and will pay a rate of 6.25% over Libor for the first 120 days and then increase by an additional 50 basis points every 60 days thereafter.
JP Morgan (administrative agent), Citigroup and Morgan Stanley are lead arrangers and joint bookrunners on the financing.
Frontier’s CFO John Jureller has stated that he plans to replace the bridge with unsecured notes by the third quarter of this year.
Under the December 2013 purchase agreement with AT&T, Frontier is acquiring all of the telco’s traditional fixed-line and fibre optic networks in the state, along with its customers. Frontier said it expected to achieve US$200m in annual synergies and cost savings.
JP Morgan acted as financial adviser to Frontier on the acquisition with Lazard financial adviser to the independent members of Frontier’s board.
Frontier specialises in offering bundled triple play services to both residential and business customers in rural areas. The company has around four million customers across 27 US states – prior to this deal – and provides satellite DTH services via Dish Network and DirecTV.
At the end of 2012, Frontier had approximately US$8.38bn in long-term total debt. It generated US$5bn in revenues last year.