Monday, April 6, 2009

Frontier explores raising $600M in notes sale

By Efrain Viscarolasaga

Stamford, Conn.-based rural telecommunications provider Frontier Communications Corp. has priced a registered offering of $600 million worth of senior unsecured notes due 2014 at 8.25 percent, for an issue price valued at 91.805 percent of the principal amount of the notes.

Frontier (NYSE: FTR) will receive approximately $538 million in net proceeds from the offering, after deducting underwriting discounts and estimated offering expenses.

Frontier intends to use funding to reduce, repurchase or refinance the company’s debts and for general corporate purposes, according to a company statement. The offering is expected to close on April 9.

Frontier was created in 2007 through the $1.29 billion merger of Stamford-based rural telecommunications provider Citizens Communications Co. and Pennsylvania-based Commonwealth Telephone Enterprises Inc. The company covers more than 23 states and offers telephone, television and Internet services, as well as wireless data, bundled offerings, ESPN360 streaming video, security platforms and specialized bundles for small businesses and home offices.

The company reported $2.2 billion in revenue in 2008, with a net income of $183 million. Those numbers represent a drop of $51 million in revenue and $32 million over 2007.