New York, June 5 – Frontier Communications Corp. released details on its offering of $1.75 billion of 11.125% series A mandatory convertible preferred stock in an FWP filing with the Securities and Exchange Commission.
The mandatories priced with an 11.125% dividend and a 17.5% initial conversion premium.
That was at the rich end of talk that had put the deal coming with a yield of 11.125% to 11.625% and an initial conversion premium of 12.5% to 17.5%.
The minimum conversion rate will be 17.0213 shares for each preferred, and the maximum will be 20.
The new preferreds were sold at their liquidation preference of $100.00 per share.
Frontier also priced a concurrent $750 million offering of common stock, selling 150 million shares at $5.00 per share.
The joint bookrunners are J.P. Morgan Securities LLC, BofA Merrill Lynch and Citigroup Capital Markets Inc.
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
|
| Mandatory conversion date: | June 29, 2018
|
| Bookrunners: | J.P. Morgan Securities LLC, BofA Merrill Lynch, 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., UBS Securities LLC
|
| Dividend: | 11.125%
|
| Price: | Par of $100.00
|
| Yield: | 11.125%
|
| Initial conversion premium: | 17.5%
|
| Threshold appreciation price: | $5.875
|
| Minimum conversion rate: | 17.0213
|
| Maximum conversion rate: | 20
|
| Pricing date: | June 4, after close
|
| Settlement date: | June 10 (long first dividend)
|
| Price talk: | 11.125% to 11.625%, up 12.5% to 17.5%
|
| Listing: | Nasdaq: FTRPR
|
| Stock listing: | Nasdaq: FTR
|
| Stock price: | $5.00 in concurrent stock offering
|
| Market capitalization: | $5.02 billion
|
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