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Frontier Plans to Skip Bond Payments in Runup to Bankruptcy

  • Telecom company is negotiating terms of DIP loan with lenders
  • Filing to come after company skips interest payments March 15
A Frontier Communications phone booth stands in Jiggs, Nevada.

A Frontier Communications phone booth stands in Jiggs, Nevada.

Photographer: David Paul Morris/Bloomberg

Updated on

Frontier Communications Corp. will forgo coupon payments due March 15 as it prepares to file for bankruptcy with a plan that cuts its debt and hands control of the company to existing creditors, according to people with knowledge of the plans.

A Frontier bankruptcy would rank as one of the biggest telecom reorganizations since Worldcom Inc. in 2002. Frontier is holding discussions this week with prospective lenders to negotiate the terms of a so-called debtor-in-possession loan, which would provide the liquidity to support the company’s restructuring, said the people, who asked not to be identified discussing the private deal.