Rural US operator Frontier Communications has signed two new debt facilities totalling US$1.1bn, in part to finance its US$2bn acquisition of fixed-line assets from AT&T.
Frontier has entered into a US$350m senior unsecured delayed draw term loan…
Rural US operator Frontier Communications has signed two new debt facilities totalling US$1.1bn, in part to finance its US$2bn acquisition of fixed-line assets from AT&T.
Frontier has entered into a US$350m senior unsecured delayed draw term loan facility with CoBank, which acted as administrative agent, lead arranger and lender.
It plans to draw on the loan in Q4, when it expects to close its purchase of AT&T’s Connecticut network, and will use the facility to fund part of the consideration for the acquisition.
Frontier initially received committed financing for the A&T deal from JP Morgan, Citigroup and Morgan Stanley, and is now looking to substitute the US$1.9bn bridge loan.
Frontier CFO John Jureller said that Frontier would remain in the public debt markets in this quarter and the next to secure permanent financing to fully replace the bridge.
Frontier is acquiring AT&T’s traditional fixed-line and fibre optic networks in Connecticut, along with its customers. The telco expects to achieve US$200m in annual synergies and cost savings through the deal.
Frontier has also agreed a US$750m revolver, with JP Morgan acting as lead arranger, bookrunner, syndication agent and administrative agent.
The new revolver has a four-year term and replaces its existing revolver, which was set to mature in 2016.
Frontier’s recently-appointed treasurer John Gianukakis said that the replacement facility simply extended the telco’s “rainy-day liquidity”.
Frontier specialises in bundled triple play services to both residential and business customers in rural areas. The company has four million customers across 27 US states and provides satellite DTH services via Dish Network and DirecTV. For 2013 it declared revenue of US$4.7bn, EBITDA of US$2.2bn and net debt of US$7.8bn.
