US-based rural broadband and satellite TV provider Frontier Communications is seeking to raise US$500m through the issue of 9-year senior unsecured notes.
Joint book-running mangers on the transaction are Barclays, Deutsche Bank, Morgan Stanley and RBS,…
US-based rural broadband and satellite TV provider Frontier Communications is seeking to raise US$500m through the issue of 9-year senior unsecured notes.
Joint book-running mangers on the transaction are Barclays, Deutsche Bank, Morgan Stanley and RBS, while co-managers are Citigroup, Credit Suisse and JP Morgan.
Net proceeds from the offer are to be used to fund a tender offer to repurchase a portion of its outstanding 8.25% senior notes due 2014 and 7.875% senior notes due 2015.
In its preliminary offer prospectus, Frontier stated that it currently has US$600m outstanding of the 2014 notes, although it is only allowed to purchase US$446m due to a sublimit covenant. Depending on how many of these notes are validly tendered, Frontier will then seek to purchase a portion of the US$500m outstanding of 2015 notes. The tender offer is due to expire on 15 June 2012.
Frontier’s other notes that are due to mature in the next couple of years include US$580.7m in 6.250% senior notes due 2013 and US$300m in 6.625% senior notes due 2015. It also has a US$100m unsecured letter of credit facility via Deutsche Bank that is due to expire on 20 September 2012.
The company last tapped the debt market back in October 2011, when it secured a US$575m five-year senior unsecured amortizing term loan. As with this latest transaction, proceeds were used to repfinance existing debt. In this case, its US$200m Rural Telephone Financing Cooperative term loan, which matures 24 October 2011, its US$143m CoBank term loan maturing 31 December 2012, and its US$130m CoBank term loan maturing year-end 2013.
Frontier specialises in offering bundled triple play services to both residential and business customers in rural areas. The company has approximately 4 million customers in 27 US states and satellite DTH services via Dish Network.
