(Bloomberg) — Frontier Communications Parent Inc. said it is planning to offer a $1.05 billion bond deal that will repackage revenue from its secured fiber network, the latest in a string of companies trying to capitalize on fiber.
Frontier's bonds, which will qualify as green, will be backed by some of its fiber assets and associated customer contracts in the Dallas area, the company said in a statement. It will use the bond proceeds to repay existing debt and for general corporate purposes, including investments as part of its fiber expansion. The company may increase the size the offering, depending on market conditions, it said.
Frontier is the latest company to borrow in the asset backed securities market with a fiber deal. MetroNet Holdings LLC, the fiber internet company backed by KKR & Co. Inc. and Oak Hill Capital Partners, in October sold a US deal that bundled contract payments from fiber lines that support internet, cable and telephone services. Others such as Allo Communications LLC, a provider of high-speed internet on fiber network, issued bonds in June, while Hotwire Communications LLC tapped the market with a fiber-backed ABS in May.
The bond offering comes as sales of asset backed securities have dropped this year. US ABS issuance is roughly 10% lower than at this time last year, according to data compiled by Bloomberg. Frontier filed for bankruptcy in April 2020 with a plan to cut more than $10 billion of its $17 billion debt by handing ownership to bondholders. It was the biggest telecom bankruptcy since WorldCom Inc. in 2002. The company
