By Angela McDaniels
Tacoma, Wash., June 4 – Frontier Communications Corp. priced $1.75 billion of 11.125% series A mandatory convertible preferred stock in a registered offering, according to a company news release.
The price is $100 per share.
The offering was talked to yield 11.125% to 11.625% with an initial conversion premium of 12.5% to 17.5%, according to market sources.
The initial conversion premium was not disclosed in the news release.
Frontier also priced $750 million of common stock.
The joint bookrunners are J.P. Morgan Securities LLC, BofA Merrill Lynch and Citigroup Capital Markets Inc.
The co-managers are Barclays, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Mizuho Securities, Deutsche Bank Securities Inc., Goldman Sachs & Co. and UBS Securities LLC.
Underwriters have an option to purchase up to an additional $175 million of the convertible preferreds and up to an additional $75 million of common stock.
Proceeds will be used to finance a portion of the cash consideration of the company’s previously announced acquisition of the wireline properties of Verizon Communications Inc. in California, Florida and Texas.
The convertibles have takeover and dividend protection.
Frontier Communications is a Stamford, Conn.-based wireline telecommunications provider.
| Issuer: | Frontier Communications Corp.
|
| Issue: | Series A mandatory convertible preferred stock
|
| Amount: | $1.75 billion
|
| Greenshoe: | $175 million
|
| Bookrunners: | J.P. Morgan Securities LLC, BofA Merrill Lynch and Citigroup Capital Markets Inc.
|
| Co-managers: | Barclays, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Mizuho Securities, Deutsche Bank Securities Inc., Goldman Sachs & Co. and UBS Securities LLC
|
| Coupon: | 11.125%
|
| Price: | Par of $100
|
| Yield: | 11.125%
|
| Pricing date: | June 4
|
| Settlement date: | June 10
|
| Price talk: | 11.125% to 11.625%, up 12.5% to 17.5%
|
| Stock listing: | Nasdaq: FTR
|
| Stock price: | $5.00 at close June 4
|
| Market capitalization: | $5.02 billion
|
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