Frontier Completes Landmark Fiber Securitization Transaction

Frontier Communications Parent, Inc. (NASDAQ: FYBR) (“Frontier” or the “Company”) today announced the closing of its previously announced fiber securitization notes offering as part of a $2.1 billion financing. The transaction unlocks access to new capital to fully fund its fiber build and provides the company with flexibility for future refinancing.

“This landmark deal is a significant milestone in our transformation and confirms the attractiveness of fiber as critical digital infrastructure,” said Scott Beasley, CFO of Frontier. “The transaction unlocks a highly attractive, investment-grade source of capital that provides us a path to fully fund our fiber build.”

Frontier is the largest pure-play fiber provider in the country and the first publicly traded company in the U.S. to secure funds backed by fiber-to-the-home assets.

For this transaction, the company created a wholly owned, newly formed, bankruptcy-remote special purpose vehicle to hold Frontier’s fiber assets and associated customer contracts in the Dallas metropolitan area and receive all payments from existing and future residential and business customers. The Notes are the first offering of green bonds by a Frontier subsidiary. Certain of Frontier’s operating subsidiaries will be engaged on an arms' length basis as manager to continue operating the securitized network and serving its customers.

“This transaction highlights the value of Frontier’s fiber network. Our Dallas market is a high performer and is one of many high-quality, mature fiber markets across our footprint that we can tap into for future securitization opportunities,” added Beasley.

Transaction Summary

A limited-purpose, bankruptcy remote, indirect subsidiary of the Company (the “Issuer”) closed an offering of $1.586 billion of aggregate principal amount of secured fiber network revenue term notes, consisting of $1.119 billion 6.60% Series 2023-1, Class A-2 term notes, $155 million 8.30% Series 2023-1, Class B term notes and $312 million 11.50% Series 2023-1, Class C term notes, each with an anticipated repayment term of five years (collectively, the “Notes”). Collectively, the Notes have a weighted average yield of approximately 8.797%. The transaction includes an implied debt per passing of $3,380 and 80% of the Notes were rated investment-grade.