Frontier amends covenant, EBITDA definition in two credit agreements

By Toni Weeks

San Luis Obispo, Calif., March 5 – Frontier Communications Corp. entered into the first amendment to its credit agreement dated Oct. 14, 2011 and the second amendment to its credit agreement dated June 2, 2014, both with CoBank, ACB as administrative agent, lead arranger and a lender, according to an 8-K filing with the Securities and Exchange Commission.

For the 2011 facility, the company modified the definition of EBITDA to provide for an additional category of add-backs, subject to certain limitations, for cost savings, operating expense reductions, other operating improvements and initiatives, and synergies relating to some acquisitions and dispositions.

It also amended the covenant limiting the creation of liens securing indebtedness by expanding the exception for liens on assets of a person merged or consolidated with or into the company to also include liens on assets of a person acquired by the company.

Both of these amendments were also made to the 2014 facility. In addition, the company added a third amendment to the 2014 facility to modify the definition of “total indebtedness” to provide that amounts held in escrow in connection with the funding of an acquisition shall be considered as unrestricted cash and therefore subtracted in calculating the amount of total indebtedness.

Upon effectiveness of the above amendments, the financing commitment obtained to finance Frontier’s pending acquisition of the wireless operations of Verizon Communications Inc. in California, Florida and Texas was automatically reduced by $744 million to $10.85 billion, the filing noted.

Stamford, Conn.-based Frontier is a wireline telecommunications provider.

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