Frontier Communications Sells Junk Bonds After Bankruptcy
(Bloomberg) -- Frontier Communications Holdings LLC tapped the junk-bond market for the first time since emerging from bankruptcy earlier this year, marking a turnaround as the company seeks to fund an ambitious overhaul of its telephone and internet network.
The telecommunications company sold a $1 billion second-lien high-yield bond on Tuesday, with proceeds earmarked to fund capital investments and operating costs from building out its fiber network and customer base, and also for general corporate purposes, according to a person with knowledge of the matter.
The note offering wrapped up at a yield of 6% after early pricing discussions in the range of 6.25%, the person added, asking not to be named discussing a private transaction. That level is lower that the average of CCC rated debt, the lowest junk tier, which has an average yield of 6.19%, according to Bloomberg Indices data.
Frontier filed for bankruptcy in April 2020 with a plan to cut more than $10 billion of its $17 billion debt load by handing ownership to bondholders. It was the biggest telecom filing since WorldCom in 2002, reflecting years of decline in its business of providing internet, TV and phone service in 29 states.
The company had earlier tapped the bond and loan markets in multiple deals to fund its exit from bankruptcy. It’s among a flurry of companies taking advantage of the hot debt markets. American Tire Distributors is selling a loan to help finance its 2018 exit from bankruptcy, while Gulf Finance LLC, which operates gas station and petroleum terminals, is raising a new loan that will give the company breathing room following discussions with lenders.
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