Securitization provides path to fully fund fiber build

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.

As previously announced, in connection with the offering of the Notes, the Issuer also entered into a commitment for a $500 million variable funding note facility (the “Variable Funding Notes”) with a delayed draw feature, subject to leverage tests and other customary drawing conditions.

This press release shall not constitute an offer to sell, or a solicitation of an offer to buy, the Notes or any other securities, and shall not constitute an offer to sell, solicitation of an offer to buy, or sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Goldman Sachs & Co. LLC acted as lead structuring advisor and lead left bookrunner. Barclays Capital Inc. acted as joint structuring agent and joint active bookrunner. Morgan Stanley & Co. LLC acted as joint active bookrunner. Citizens Capital Markets, Inc., Deutsche Bank Securities Inc., Fifth Third Securities, Inc., J.P. Morgan Securities LLC and TD Securities (USA) LLC acted as passive bookrunners. Ropes & Gray LLP served as counsel to Frontier and Milbank LLP served as counsel to the initial purchasers in the offering.

About Frontier

Frontier (NASDAQ: FYBR) is the largest pure-play fiber provider in the U.S. Driven by our purpose, Building Gigabit America®, we deliver blazing-fast broadband connectivity that unlocks the potential of millions of consumers and businesses.

Forward-Looking Statements

This release contains “forward-looking statements” related to future events. Forward-looking statements address our expectations or beliefs concerning future events, including, without limitation, the entry into the Variable Funding Notes facility and the terms of such facility and any amounts drawn thereupon, any future securitization opportunities and other matters. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and performance and contain words such as “intends to” or “will be.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. A wide range of factors could materially affect future developments and performance, including, but not limited to, uncertainties related to market conditions, our ability to consummate the Variable Funding Notes facility and other factors set forth in our other filings with the U.S. Securities and Exchange Commission (the “SEC”). This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative and is not intended to be exhaustive. You should consider these important factors, as well as the risks and other factors contained in our filings with the SEC, including our most recent Annual Report on Form 10-K. These risks and uncertainties may cause actual future results to be materially different than those expressed in such forward-looking statements. We do not intend, nor do we undertake any duty, to update any forward-looking statements.

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