Frontier Communications has closed its $750 million fiber securitization notes offering initially announced in June.
This is the telco’s second fiber securitization this year.
Last August, Frontier Communications announced it would offer $1.05 billion aggregate principal amount of secured fiber network revenue term notes, with the potential to upsize, in a move that could narrow its fiber build funding gap.
The Notes will be secured by certain Frontier’s fiber assets and associated customer contracts in the Dallas metropolitan area and be the first offering of green bonds by a Frontier subsidiary.
“The completion of our second securitization offering in less than a year highlights the value of Frontier’s fiber network and the attractiveness of fiber as critical digital infrastructure,” said Scott Beasley, Chief Financial Officer of Frontier. “These transactions are a cost-efficient way to fund our fiber strategy and Build Gigabit America while also providing flexibility to refinance higher-cost debt, extend our term loan, and lower our overall cost of capital.”
The offering consists of $530 million 6.2% Series 2024-1, Class A-2 term notes, $73 million 7.0% Series 2024-1, Class B term notes and $147 million 11.2% Series 2024-1, Class C term notes, each with an anticipated repayment date in May 2031. Collectively, the Notes have a weighted average yield of approximately 7.4%.
The Notes are secured by certain Frontier’s fiber assets and associated customer contracts in North Texas and qualify as green bonds.
Additionally, Frontier closed an amendment to its senior secured term loan facility with JPMorgan Chase Bank, N.A., as an administrative agent.
Frontier, which will announce its earnings on August 2, has set an aggressive target for its fiber network build. At the end of the first quarter, the telco added 322,000 fiber passings, putting it on track to achieve its goal of 1.3 million passings this year.
It also added 88,000 fiber broadband customers in the quarter. Consumer fiber broadband churn was also solid in the quarter, remaining low at 1.2%
Sean Buckley
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