Entry into a Material Definitive Agreement
Closing of Notes Offering
On March 15, 2019, Frontier Communications Corporation (“Frontier” or the “Company”) issued $1.65 billion aggregate principal amount of 8.000% First Lien
Secured Notes due 2027 (the “First Lien Notes”). The First Lien Notes were issued pursuant to an indenture, dated as of March 15, 2019 (the “Indenture”), by and among Frontier, the guarantors party thereto, the grantor party thereto, JPMorgan Chase
Bank, N.A., as collateral agent, and The Bank of New York Mellon, as trustee. The First Lien Notes were issued in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to
persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and to persons outside the United States pursuant to Regulation S under the Securities Act, at a purchase price equal to 100% of
the principal amount thereof.
The First Lien Notes are secured on a first-priority basis by all the assets that secure Frontier’s obligations under its senior secured credit facilities
on a first-priority basis.
The First Lien Notes will bear interest at a rate of 8.000% per annum and will mature on April 1, 2027. Interest on the First Lien Notes will be payable to
holders of record semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2019.
Frontier may redeem the First Lien Notes at any time, in whole or in part, prior to their maturity. The redemption price for First Lien Notes redeemed
before April 1, 2022 will be equal to 100% of the principal amount thereof, together with any accrued and unpaid interest to the redemption date, plus a make-whole premium. The redemption price for First Lien Notes redeemed on or after April 1,
2022 will be equal to the redemption prices set forth in the Indenture, together with any accrued and unpaid interest to the redemption date. In addition, at any time before April 1, 2022, Frontier may redeem up to 40% of the First Lien Notes using
the proceeds of certain equity offerings.
In the event of a change of control triggering event, each holder of First Lien Notes will have the right to require Frontier to purchase for cash such
holder’s First Lien Notes at a purchase price equal to 101% of the principal amount of the First Lien Notes, plus accrued and unpaid interest.
The Indenture contains customary negative covenants, subject to a number of important exceptions and qualifications, including, without limitation,
covenants related to indebtedness, disqualified stock and preferred stock; dividends and distributions to stockholders and parent entities; repurchase and redemption of capital stock; investments and acquisitions; transactions with affiliates;
liens; mergers, consolidations and transfers of substantially all assets; transfer or sale of assets, including capital stock of subsidiaries; and prepayment, redemption or repurchase of indebtedness subordinated to the First Lien Notes. Certain of
these covenants will be suspended during such time, if any, that the First Lien Notes have investment grade ratings by at least two of Moody’s, S&P or Fitch.
The Indenture also provides for customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on
the First Lien Notes to become or to be declared due and payable.
The Company used the proceeds from the offering of the First Lien Notes, together with cash on hand, to (i) repay in full the outstanding borrowings under
its senior secured term loan A facility, which otherwise would have matured in March 2021, (ii) repay in full the outstanding borrowings under its credit agreement with CoBank ACB, which otherwise would have matured in October 2021, and (iii) pay
related interest, fees and expenses.
The foregoing description of the Indenture is qualified in its entirety by reference to the full text of the Indenture, a copy of which is filed with this
report as Exhibit 4.1 and is incorporated by reference herein.
Entry into Credit Agreement Amendment
On March 15, 2019, Frontier entered into Amendment No. 4 (the “Amendment”) to its first amended and restated credit agreement, dated as of February 27,
2017, with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. Among other things, the Amendment (i) extends the maturity date of $835 million of the revolving loans and commitments thereunder from February 27,
2022 to February 27, 2024 (subject to springing maturity to any tranche of our existing debt with an aggregate outstanding principal amount in excess of $500 million), (ii) increases the interest rate applicable to such revolving loans by 0.25% and
(iii) makes certain modifications to the debt and restricted payment covenants, in each case, as fully set forth in the 4th Amendment. The maturity date of any revolving loans and commitments not extended pursuant to the 4th Amendment remains
February 27, 2022.
The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed with this
report as Exhibit 10.1 and is incorporated by reference herein.