Frontier Communications accepts tenders for $400 million of 8¼% notes

By Susanna Moon

Chicago, June 1 - Frontier Communications Corp. said it accepted for purchase $400 million principal amount of its 8¼% senior notes due 2014 tendered by the early offer deadline of 5 p.m. ET on May 31.

The total purchase price for the 8¼% notes is equal to the maximum payment sublimit of $446 million, according to a company press release.

Investors had tendered $408,336,000 principal amount of the 8¼% notes, and the company said it purchased the notes using a proration factor of about 98%.

As a result of the offer being oversubscribed, no additional 8¼% notes will be accepted after the early tender deadline.

Frontier used proceeds from the sale of its $500 million 9¼% senior notes due 2021 to fund the offer.

After settlement, $200 million of the notes remain outstanding.

The company began the tender offer May 17 for its $600 million of 8¼% notes and its $500 million of 7 7/8% senior notes due 2015.

As previously noted, the company will spend up to $500 million to purchase the two note series, with the 8¼% repurchase limited to $446 million. Of the $500 million limit, $54 million remains available to purchase 7 7/8% notes.

The tender offer will end at 9 a.m. ET on June 15. Tendered notes may no longer be withdrawn.

As of the early deadline, holders had tendered about $146 million principal amount of the 7 7/8% notes.

The company will pay $1,115.00 for each $1,000 principal amount of 8¼% notes and $1,091.25 for each $1,000 principal amount of 7 7/8% notes. The total purchase price includes a $20.00 early tender premium for notes tendered by the early tender date.

Holders will also receive accrued interest up to but excluding the payment date.

Frontier is not soliciting consents from holders of the notes in connection with the tender offer.

The tender offer was subject to the completion of Frontier's concurrent registered note offering of at least $500 million.

Deutsche Bank Securities Inc. (855 287-1922 or 212 250-7527) is the coordinating dealer manager. Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are co-dealer managers. MacKenzie Partners, Inc. (800 322-2885 or 212 929-5500) is the depositary and information agent.

The Stamford, Conn.-based company offers voice, broadband, satellite video, wireless internet data access and data security solutions.

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