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Press release from Business Wire

Frontier Communications Announces Upsize and Amendment to Tender Offers to Include 8.250% Senior Notes due 2017

Thursday, March 28, 2013

Frontier Communications Announces Upsize and Amendment to Tender Offers to Include 8.250% Senior Notes due 2017

10:31 EDT Thursday, March 28, 2013

STAMFORD, Conn. (Business Wire) -- Frontier Communications Corporation (NASDAQ: FTR) today announced an amendment to the terms of its previously announced cash tender offers to purchase any and all of its outstanding 6.625% Senior Notes due 2015 (the “March 2015 Notes”) and any and all of its outstanding 7.875% Senior Notes due 2015 (the “April 2015 Notes”). The Company has added a new tender offer to purchase up to $225.0 million aggregate principal amount (the “Modified Dutch Auction Cap”) of its 8.250% Senior Notes due 2017 (the “2017 Notes” and, together with the March 2015 Notes and the April 2015 Notes, the “Notes”) and upsized the aggregate principal amount of notes to be purchased in such tenders offers to $899.8 million. The tender offers for each series of the Notes are referred to herein as the “Offers”. This press release restates the terms of the Offers in their entirety and supersedes the Company's previous press release relating to the Offers issued yesterday.

Pursuant to the terms of the Offers, as amended, the Company is seeking to purchase up to $899.8 million aggregate principal amount of senior notes, consisting of any and all of its outstanding March 2015 Notes, any and all of its outstanding April 2015 Notes and an aggregate principal amount up to the Modified Dutch Auction Cap of its 2017 Notes on the terms and subject to the conditions set forth in the Offer to Purchase, dated the date hereof (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal”). The Offers are scheduled to expire at 9:00 a.m., New York City Time, on April 24, 2013, unless extended or terminated (such time and date, as the same may be extended, the “Expiration Date”), and are expected to be funded with the net proceeds of a concurrent debt offering of $750.0 million together with cash on hand.

Information relating to the Notes subject to the Offers is set forth in the table below.

            Outstanding Principal       Early Tender      

Total Consideration (Bid

Title of Notes CUSIP Number Amount Premium(1)

Price Range)(1)(2)

6.625% Senior Notes due 2015 17453BAT8 $300,000,000 $30.00 $1,112.37
7.875% Senior Notes due 2015 35906AAC2

35906AAD0

$374,803,000 $30.00 $1,141.91
8.250% Senior Notes due 2017 35906AAF5 $831,874,000 (3) $30.00 $1,160.00 – $1,200.00
 
(1)   Per $1,000 principal amount of Notes validly tendered (and not validly withdrawn) at or prior to the applicable Early Tender Deadline (as defined below) and accepted for purchase.
(2) Includes the applicable Early Tender Premium (as defined below).
(3) Reflects the repurchase of $208.8 million aggregate principal amount of the 2017 Notes pursuant to an unconditional and binding privately negotiated transaction expected to settle on April 2, 2013.
 

Holders who validly tender (and do not validly withdraw) March 2015 Notes at or prior to 5:00 p.m., New York City time, on April 9, 2013, unless extended (the “March 2015 Notes Early Tender Deadline”), will be eligible to receive the “March 2015 Notes Total Consideration,” which for each $1,000 principal amount of March 2015 Notes validly tendered is equal to $1,112.37 including an early tender premium (the “March 2015 Notes Early Tender Premium”) of $30.00 per $1,000 principal amount of March 2015 Notes. Holders who validly tender (and do not validly withdraw) March 2015 Notes after the March 2015 Notes Early Tender Deadline and prior to the Expiration Date will not be eligible to receive the March 2015 Notes Early Tender Premium, and instead will be eligible to receive only the “March 2015 Notes Offer Consideration,” which for each $1,000 principal amount of March 2015 Notes is equal to the March 2015 Notes Total Consideration less the March 2015 Notes Early Tender Premium.

Holders who validly tender (and do not validly withdraw) April 2015 Notes at or prior to 5:00 p.m., New York City time, on April 9, 2013, unless extended (the “April 2015 Notes Early Tender Deadline”), will be eligible to receive the “April 2015 Notes Total Consideration,” which for each $1,000 principal amount of April 2015 Notes validly tendered is equal to $1,141.91, including an early tender premium (the “April 2015 Notes Early Tender Premium”) of $30.00 per $1,000 principal amount of April 2015 Notes. Holders who validly tender (and do not validly withdraw) April 2015 Notes after the April 2015 Notes Early Tender Deadline and prior to the Expiration Date will not be eligible to receive the April 2015 Notes Early Tender Premium, and instead will be eligible to receive only the “April 2015 Notes Offer Consideration,” which for each $1,000 principal amount of April 2015 Notes is equal to the April 2015 Notes Total Consideration less the April 2015 Notes Early Tender Premium.

The consideration payable for each $1,000 principal amount of 2017 Notes will be determined based on a modified “Dutch Auction” procedure. The aggregate principal amount of 2017 Notes to be repurchased by Frontier is limited to the Modified Dutch Auction Cap. Holders who validly tender (and do not validly withdraw) 2017 Notes at or prior to 5:00 p.m., New York City time, on April 9, 2013, unless extended (the “2017 Notes Early Tender Deadline”), will be eligible to receive the applicable “2017 Notes Total Consideration,” including an early tender premium (the “2017 Notes Early Tender Premium”) of $30.00 per $1,000 principal amount of 2017 Notes. Holders who validly tender (and do not validly withdraw) 2017 Notes after the 2017 Notes Early Tender Deadline and prior to the Expiration Date will not be eligible to receive the 2017 Notes Early Tender Premium, and instead will be eligible to receive only the “2017 Notes Offer Consideration,” which for each $1,000 principal amount of 2017 Notes is equal to the 2017 Notes Total Consideration less the 2017 Notes Early Tender Premium. Frontier reserves the right, in its sole discretion, to increase the Modified Dutch Auction Cap for the 2017 Notes subject to compliance with applicable law.

As more fully described in the Offer to Purchase, the 2017 Notes Total Consideration for each $1,000 principal amount of the 2017 Notes validly tendered (and not validly withdrawn) at or prior to the 2017 Notes Early Tender Deadline and accepted for purchase will be equal to the sum of: (1) the “Base Price” for the 2017 Notes, which is also equal to the minimum “bid price” specified in the table above and (2) the “Clearing Premium,” which will be determined pursuant to a modified “Dutch Auction” by consideration of the “bid price” specified by each holder that tenders 2017 Notes. The bid price for tendered 2017 Notes represents the minimum consideration a holder is willing to receive for those 2017 Notes and must fall within the acceptable bid price range specified in the table above and be in increments of $1.25 per $1,000 principal amount of 2017 Notes. The “Clearing Premium” for the 2017 Notes will be the lowest single bid premium (the amount by which the bid price exceeds the Base Price) at which Frontier will be able to purchase 2017 Notes in an aggregate principal amount equal to the Modified Dutch Auction Cap. If the aggregate principal amount of 2017 Notes validly tendered (and not validly withdrawn) at or below the Clearing Premium would cause Frontier to purchase an aggregate principal amount of 2017 Notes in excess of the Modified Dutch Auction Cap, then holders of 2017 Notes tendered at the Clearing Premium will be subject to proration.

The consummation of the Offers is subject to the satisfaction or waiver of a number of conditions, including the consummation of Frontier's concurrent debt offering in an aggregate principal amount of $750.0 million (the “Financing Condition”). The Offers are not conditioned on the tender of a minimum principal amount of Notes and Frontier is not soliciting consents from holders of Notes in connection with the Offers. In addition, Frontier has the right, in its sole discretion, to amend or extend the terms of or terminate any of the Offers at any time, subject to applicable law.

The “Early Settlement Date” will occur promptly after Frontier accepts for purchase all March 2015 Notes and April 2015 Notes validly tendered by the applicable early tender date. Provided that the Financing Condition and all other conditions are satisfied or waived on or prior to the business day immediately following the applicable early tender date, Frontier currently expects that the Early Settlement Date in respect of the March 2015 Notes and April 2015 Notes will occur promptly following the applicable early tender date on April 10, 2013. The “Final Settlement Date” will occur promptly after Frontier accepts for purchase (a) all March 2015 Notes and April 2015 Notes validly tendered (and not validly withdrawn) after the applicable early tender date (but at or prior to the Expiration Date) and (b) all 2017 Notes validity tendered (and not validly withdrawn) at or prior to the Expiration Date, subject to the limits described above. Frontier anticipates that the Final Settlement Date will be the same as the Expiration Date, which is currently expected to be April 24, 2013.

In addition, Frontier will pay accrued and unpaid interest on all Notes tendered and accepted for payment in the Offers from the last interest payment date up to, but not including, the applicable settlement date.

Tenders for Notes may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on April 9, 2013, unless extended, but not thereafter unless otherwise required by applicable law.

Frontier has retained J.P. Morgan Securities LLC, Barclays Capital Inc., BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC and RBS Securities Inc. to serve as dealer managers for the Offers. Frontier has retained MacKenzie Partners, Inc. to serve as the depositary and information agent.

For additional information regarding the terms of the Offers, please contact J.P. Morgan Securities LLC at (800) 245-8812 (toll free) or (212) 270-1200 (collect), Barclays Capital Inc. at (800) 438-3242 (toll free) or (212) 528-7581 (collect), BofA Merrill Lynch at (888) 292-0070 (toll free) or (646) 855-3401 (collect), Citigroup Global Markets Inc. at (800) 558-3745 (toll free) or (212) 723-6106 (collect), Credit Suisse Securities (USA) LLC at (800) 820-1653 (toll free) or (212) 538-0083 (collect), Deutsche Bank Securities Inc. at (866) 627-0391 (toll free) or (212) 250-7527 (collect), Morgan Stanley & Co. LLC at (800) 624-1808 (toll free) or (212) 761-1057 (collect) or RBS Securities Inc. at (877) 297-9832 (toll free) or (203) 897-4825 (collect). Requests for documents and questions regarding the tender of the Notes may be directed to MacKenzie Partners, Inc. at (800) 322-2885 (toll free) or (212) 929-5500 (collect).

The Offer to Purchase and the related Letter of Transmittal are expected to be distributed to holders beginning today. Copies of the Offer to Purchase and the Letter of Transmittal may also be obtained at no charge from MacKenzie Partners, Inc.

None of Frontier, Frontier's board of directors, any of the dealer managers, the depositary and information agent and the trustee under the Notes makes any recommendation in connection with the Offers. Holders must make their own decisions as to whether to tender their Notes, and, if so, the principal amount of Notes to tender.

This announcement does not constitute an offer to buy or the solicitation of an offer to sell any securities in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful. In those jurisdictions where the securities, blue sky or other laws require the Offers to be made by a licensed broker or dealer, the Offers will be deemed to be made by the dealer managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

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 business communications for medium and large businesses in 27 states. Frontier's approximately 14,700 employees are based entirely in the United States. More information is available at www.frontier.com.

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: the effects of greater than anticipated competition which could require us to develop 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; the effects of competition from cable, wireless and other wireline carriers; 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 funding to us and our competitors; our ability to adjust successfully 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, product and service offerings and measurement of speeds and capacity, including the lack of assurance that our network improvements will be sufficient to meet or exceed the capabilities and quality of competing networks; the effects of increased medical, pension and postemployment expenses 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 in 2013 and thereafter; 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 2013 and beyond; the effects of customer bankruptcies and home foreclosures, 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; 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. These and other uncertainties related to our business are described in greater detail in our filings with the Securities and Exchange Commission, including 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.

Frontier Communications Corporation
INVESTOR CONTACTS:
Robert Starr, 203-614-5708
Senior Vice President and Treasurer
robert.starr@ftr.com
or
Luke Szymczak, 203-614-5044
Vice President, Investor Relations
luke.szymczak@ftr.com
or
MEDIA CONTACT:
Brigid Smith
Assistant Vice President, Corporate Communications
203-614-5042
brigid.smith@ftr.com

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