Fitch Rates Proposed Frontier Communications' Offering 'BB+'
Fitch Ratings-Chicago-08 August 2012: Fitch Ratings has assigned a 'BB+' rating to Frontier Communications Corporation's (Frontier) (NASDAQ: FTR) proposed offering of $500 million of senior unsecured notes due 2023. Frontier will use the proceeds for debt reduction or general corporate purposes. Fitch's Issuer Default Rating (IDR) for Frontier is 'BB+'. The Rating Outlook is Stable.
Frontier's 'BB+' IDR reflects the meaningful improvement in its credit profile following the acquisition of access lines in 14 states from Verizon on July 1, 2010. Frontier has articulated a long-term leverage target of approximately 2.5 times (x). The company is still above this target as gross debt-to-EBITDA for the last 12 months ending June 30, 2012 was 3.4x. In 2012, Fitch expects leverage to improve to 3.3x, pro forma for the repayment of a $523 million maturity in mid-January 2013.
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