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Frontier Said to Plan Bond Sale for AT&T Connecticut Deal

Frontier Communications Corp. (FTR) will sell bonds to support its $2 billion purchase of AT&T Inc. (T)’s Connecticut landline business and fiber-optic network, according to a person with knowledge of the deal.

JPMorgan Chase & Co. has committed financing for the acquisition and Frontier will access the debt markets in the second quarter or third quarter next year, John Jureller, chief financial officer, said in a teleconference today to discuss the the transaction with analysts and investors. The company may try to raise around $1.9 billion, he said.

The broadband and telecommunications company with $8.13 billion of debt, is acquiring AT&T’s U-verse television and broadband customers in the state, as well as satellite TV subscribers, the companies said in a statement today. The business is forecast to have revenue of $1.25 billion in 2014 and earnings before interest, taxes, depreciateion and amortization of $413 million, Maggie Wilderotter, Frontier’s chief executive officer, said on today’s call.

Frontier’s $850 million of 7.125 percent notes due in January 2023 fell 1.13 cents to 99.875 cents on the dollar to yield 7.14 percent at 11:41 a.m., according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority.

The deal, which will need to be approved by the U.S. Department of Justice, the Federal Communications Commission, the Connecticut Public Utilities Regulatory Authority and other state regulatory agencies, is expected to close in the second half of next year.

To contact the reporter on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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