Frontier Communications Prices Offering of $1.55 Billion of Senior Notes
September 03 2014 - 5:15PM
Business Wire
Frontier Communications Corporation (NASDAQ:FTR) announced today
that it has priced $1.55 billion aggregate principal amount of
Senior Notes.
Frontier intends to use the net proceeds from the offering of
the Notes to fund a portion of the purchase price of its
acquisition of the wireline properties of AT&T Inc. in
Connecticut, which is expected to close in the fourth quarter of
2014. The net proceeds of the offering will be deposited in an
escrow account to be applied to fund in part the acquisition or, if
the acquisition is terminated or otherwise not consummated by
August 17, 2015, to redeem the Notes at par plus accrued
interest.
The Senior Notes consist of $775 million aggregate principal
amount of Senior Notes due 2021 (the “2021 Notes”) and $775 million
aggregate principal amount of Senior Notes due 2025 (the “2025
Notes” and together with the 2021 Notes, the “Notes”).
The 2021 Notes will have an interest rate of 6.250% per annum
and the 2025 Notes will have an interest rate of 6.875% per annum.
The Notes will be issued at a price equal to 100% of their
principal amount.
The joint book-running managers for the offering are J.P. Morgan
Securities LLC, Citigroup Global Markets Inc. and Morgan Stanley
& Co. LLC, and the co-managers are Barclays Capital Inc.,
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc.,
and RBS Securities Inc. You may obtain a preliminary prospectus
supplement and prospectus by contacting J.P. Morgan Securities LLC,
c/o Broadridge Financial Solutions, 1155 Long Island Avenue,
Edgewood, New York 11717, at (866) 803-9204 (toll free).
This press release shall not constitute an offer to sell, or the
solicitation of an offer to buy, any securities, nor shall there be
any sales of securities mentioned in this press release in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. A registration statement
relating to the Notes became effective on May 10, 2012, and the
offering is being made by means of a prospectus supplement.
About Frontier Communications
Frontier Communications Corporation (NASDAQ: FTR) offers
broadband, voice, satellite video, wireless Internet data access,
data security solutions, bundled offerings, specialized bundles for
residential customers, small businesses and home offices and
advanced communications for medium and large businesses in 27
states. Frontier's approximately 13,900 employees are based
entirely in the United States.
Forward-Looking Statements
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of The Private
Securities Litigation Reform Act of 1995. These statements are made
on the basis of management's views and assumptions regarding future
events and business performance. Words such as "believe,"
"anticipate," "expect" and similar expressions are intended to
identify forward-looking statements. Forward-looking statements
(including oral representations) involve risks and uncertainties
that may cause actual results to differ materially from any future
results, performance or achievements expressed or implied by such
statements. These risks and uncertainties are based on a number of
factors, including but not limited to: our ability to complete the
acquisition of the Connecticut operations from AT&T (the
“AT&T Transaction”) on the terms or timeline currently
contemplated, or at all; the ability to successfully integrate the
Connecticut operations into our existing operations and the
diversion of management’s attention from ongoing business and
regular business responsibilities to effect such integration; the
effects of increased expenses or unanticipated liabilities incurred
due to activities related to the AT&T Transaction; the risk
that the cost savings from the AT&T Transaction may not be
fully realized or may take longer to realize than expected or that
our actual integration costs may exceed our estimates; the
sufficiency of the assets to be acquired from AT&T to enable
the combined company to operate all aspects of the acquired
business; failure to enter into or obtain, or delays in entering
into or obtaining, certain agreements and consents necessary to
operate the acquired business as planned; the failure to obtain,
delays in obtaining or adverse conditions contained in any required
regulatory approvals for the AT&T Transaction; disruption from
the AT&T Transaction making it more difficult to maintain
relationships with customers or suppliers of the Connecticut
operations; our debt and debt service obligations, which will
increase following this offering and the AT&T Transaction; the
effects of greater than anticipated competition from cable,
wireless and other wireline carriers that could require us to
implement new pricing, marketing strategies or new product or
service offerings and the risk that we will not respond on a timely
or profitable basis; reductions in the number of our voice
customers that we cannot offset with increases in broadband
subscribers and sales of other products and services; our ability
to maintain relationships with customers, employees or suppliers;
the effects of ongoing changes in the regulation of the
communications industry as a result of federal and state
legislation and regulation, or changes in the enforcement or
interpretation of such legislation and regulation; the effects of
any unfavorable outcome with respect to any current or future
legal, governmental or regulatory proceedings, audits or disputes;
the effects of changes in the availability of federal and state
universal service funding or other subsidies to us and our
competitors; our ability to successfully adjust to changes in the
communications industry and to implement strategies for growth;
continued reductions in switched access revenues as a result of
regulation, competition or technology substitutions; our ability to
effectively manage service quality in our territories and meet
mandated service quality metrics; our ability to successfully
introduce new product offerings, including our ability to offer
bundled service packages on terms that are both profitable to us
and attractive to customers; the effects of changes in accounting
policies or practices adopted voluntarily or as required by
generally accepted accounting principles or regulations; our
ability to effectively manage our operations, operating expenses
and capital expenditures, and to repay, reduce or refinance our
debt; the effects of changes in both general and local economic
conditions on the markets that we serve, which can affect demand
for our products and services, customer purchasing decisions,
collectability of revenues and required levels of capital
expenditures related to new construction of residences and
businesses; the effects of technological changes and competition on
our capital expenditures, products and service offerings, including
the lack of assurance that our network improvements in speed and
capacity will be sufficient to meet or exceed the capabilities and
quality of competing networks; the effects of increased medical
expenses (including as a result of the impact of the Patient
Protection and Affordable Care Act) and pension and postemployment
expenses, such as retiree medical and severance costs, and related
funding requirements; the effects of changes in income tax rates,
tax laws, regulations or rulings, or federal or state tax
assessments; our ability to successfully renegotiate union
contracts; changes in pension plan assumptions and/or the value of
our pension plan assets, which could require us to make increased
contributions to the pension plan in 2014 and beyond; the effects
of economic downturns, which could result in difficulty in
collection of revenues and loss of customers; adverse changes in
the credit markets or in the ratings given to our debt securities
by nationally accredited ratings organizations, which could limit
or restrict the availability, or increase the cost, of financing to
us; our cash flow from operations, amount of capital expenditures,
debt service requirements, cash paid for income taxes and liquidity
may affect our payment of dividends on our common shares; the
effects of state regulatory cash management practices that could
limit our ability to transfer cash among our subsidiaries or
dividend funds up to the parent company; and the effects of severe
weather events such as hurricanes, tornadoes, ice storms or other
natural or man-made disasters, which may increase our operating
expenses or adversely impact customer revenue. These and other
uncertainties related to our business are described in greater
detail in our filings with the Securities and Exchange Commission,
including the registration statement, the prospectus supplement and
our reports on Forms 10-K and 10-Q, and the foregoing information
should be read in conjunction with these filings. We do not intend
to update or revise these forward-looking statements to reflect the
occurrence of future events or circumstances.
INVESTORS:Frontier CommunicationsJohn Gianukakis,
203-614-5708Vice President and
Treasurerjohn.gianukakis@ftr.comorLuke Szymczak, 203-614-5044Vice
President, Investor
Relationsluke.szymczak@ftr.comorMEDIA:Brigid Smith,
203-614-5042AVP, Corporate Communicationsbrigid.smith@ftr.com
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