Frontier Communications to Prepare Bankruptcy Ahead of April 15 Payment

(Bloomberg) -- Frontier Communications Corp. expects to file for bankruptcy as soon as Tuesday night with a plan to hand control to its unsecured creditors, according to people with knowledge of the matter.

The telecom company is finalizing a restructuring plan that would see its $10.9 billion of unsecured notes convert to equity, with holders also receiving about $750 million in new notes, the people said. Frontier’s secured debt would be left in place. The people asked not to be identified discussing the confidential plan, which would be filed ahead of debt payments due April 15.

Frontier, which provides internet, TV and phone service in 29 states, would continue operating while in bankruptcy, helped by a debtor-in-possession loan still being negotiated on Tuesday that could be around $500 million, the people said. The Norwalk, Connecticut-based company expects to file for Chapter 11 protection in White Plains, New York, they said.

A representative for Frontier declined to comment.

Frontier has been negotiating with its creditors for months toward a restructuring deal that would cut some of its approximately $17.5 billion of debt. It triggered a grace period on March 16 by skipping payments due on that day. The company previously disclosed restructuring terms under discussion that would cut its debt by about $11.7 billion.

The company is getting advice from Kirkland & Ellis LLP and Evercore Inc. Representatives for Kirkland didn’t immediately respond to message, and Evercore declined to comment.

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