(8) Long-Term Debt:

The activity in our long-term debt from January 1, 2018 through June 30, 2018 is summarized as follows:




			For the six months ended June 30, 2018

($ in millions)	January 1, 2018		Payments and Retirements		New Borrowings		June 30, 2018		Interest Rate at June 30, 2018*

Secured debt issued by Frontier	$	3,511	$	(82)	$	1,600	$	5,029	7.03%
Unsecured debt issued by Frontier		13,495		(1,699)		-		11,796	9.51%
Secured debt issued by subsidiaries		107		(1)		-		106	8.35%
Unsecured debt issued by subsidiaries		750		-		-		750	6.90%
Total debt	$	17,863	$	(1,782)	$	1,600	$	17,681	8.69%

Less: Debt Issuance Costs		(183)						(192)
Less: Debt Premium/(Discount)		(54)						(52)
Less: Current Portion		(656)						(1,228)
	$	16,970					$	16,209

* Interest rate includes amortization of debt issuance costs and debt premiums or discounts. The interest rates at June 30, 2018 represent a weighted average of multiple issuances.

Additional information regarding our long-term debt as of June 30, 2018 and December 31, 2017 is as follows:



	June 30, 2018			December 31, 2017

	Principal		Interest	Principal		Interest
($ in millions)	Outstanding		Rate	Outstanding		Rate

Secured debt issued by Frontier
Term loan due 10/24/2019 (1)	$	228	8.375% (Variable)	$	245	5.445% (Variable)
Term loan due 3/31/2021 (2)		1,442	4.850% (Variable)		1,483	4.320% (Variable)
Term loan due 10/12/2021(3)		260	8.375% (Variable)		276	5.445% (Variable)
Term loan due 6/15/2024 (4)		1,485	5.850% (Variable)		1,492	5.320% (Variable)
Second lien notes due 4/1/2026		1,600	8.500%		-
IDRB due 5/1/2030		13	6.200%		13	6.200%
Equipment financings		1	0.000%		2	0.000%
Total secured debt issued by Frontier		5,029			3,511

Unsecured debt issued by Frontier
Senior notes due 10/1/2018		443	8.125%		491	8.125%
Senior notes due 3/15/2019		404	7.125%		404	7.125%
Senior notes due 4/15/2020		172	8.500%		619	8.500%
Senior notes due 9/15/2020		55	8.875%		303	8.875%
Senior notes due 7/1/2021		89	9.250%		490	9.250%
Senior notes due 9/15/2021		220	6.250%		775	6.250%
Senior notes due 4/15/2022		500	8.750%		500	8.750%
Senior notes due 9/15/2022		2,188	10.500%		2,188	10.500%
Senior notes due 1/15/2023		850	7.125%		850	7.125%
Senior notes due 4/15/2024		750	7.625%		750	7.625%
Senior notes due 1/15/2025		775	6.875%		775	6.875%
Senior notes due 9/15/2025		3,600	11.000%		3,600	11.000%
Debentures due 11/1/2025		138	7.000%		138	7.000%
Debentures due 8/15/2026		2	6.800%		2	6.800%
Senior notes due 1/15/2027		346	7.875%		346	7.875%
Senior notes due 8/15/2031		945	9.000%		945	9.000%
Debentures due 10/1/2034		1	7.680%		1	7.680%
Debentures due 7/1/2035		125	7.450%		125	7.450%
Debentures due 10/1/2046		193	7.050%		193	7.050%
Total unsecured debt issued by Frontier		11,796			13,495

Secured debt issued by subsidiaries
Debentures due 11/15/2031		100	8.500%		100	8.500%
RUS loan contracts due 1/3/2028		6	6.152%		7	6.152%
Total secured debt issued by subsidiaries		106			107

Unsecured debt issued by subsidiaries
Debentures due 5/15/2027		200	6.750%		200	6.750%
Debentures due 2/1/2028		300	6.860%		300	6.860%
Debentures due 2/15/2028		200	6.730%		200	6.730%
Debentures due 10/15/2029		50	8.400%		50	8.400%
Total unsecured debt issued by subsidiaries		750			750

Total debt	$	17,681	8.7%(5)	$	17,863	8.1%(5)

(1) Represents borrowings under the 2014 CoBank Credit Agreement, as defined below.

(2) Represents borrowings under the JPM Credit Agreement Term Loan A, as defined below.

(3) Represents borrowings under the 2016 CoBank Credit Agreement, as defined below.

(4) Represents borrowings under the JPM Credit Agreement Term Loan B, as defined below.

(5) Interest rate represents a weighted average of the stated interest rates of multiple issuances.

Term Loans and Credit Facilities:

JP Morgan Credit Facilities

On February 27, 2017, Frontier entered into a first amended and restated credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto, pursuant to which Frontier combined its revolving credit agreement, dated as of June 2, 2014, and its term loan credit agreement, dated as of August 12, 2015. Under the JPM Credit Agreement, as further amended on June 15, 2017 by Increase Joinder No.1 and on July 3, 2018 by Increase Joinder No. 2 (as so amended, the JPM Credit Agreement), Frontier has a $1,625 million senior secured term loan A facility (the Term Loan A) maturing on March 31, 2021, an $850 million undrawn secured revolving credit facility maturing on February 27, 2022 (the Revolver), and a $1,740 million senior secured term loan B facility (the Term Loan B) maturing on June 15, 2024. The maturities of the Term Loan A, the Revolver, and the Term Loan B, in each case if still outstanding, will be accelerated in the following circumstances: (i) if, 91 days before the maturity date of any series of Senior Notes maturing in 2020, 2023 and 2024, more than $500 million in principal amount remains outstanding on such series; or (ii) if, 91 days before the maturity date of the first series of Senior Notes maturing in 2021 or 2022, more than $500 million in principal amount remains outstanding, in the aggregate, on the two series of Senior Notes maturing in such year.

On January 25, 2018 Frontier amended the JPM Credit Agreement to, among other things, expand the security package to include the interests of certain subsidiaries previously not pledged and replace the net leverage ratio maintenance test with a first lien net leverage ratio maintenance test.

The determination of interest rates for each of the facilities under the JPM Credit Agreement is based on margins over the Base Rate (as defined in the JPM Credit Agreement) or over LIBOR, at the election of Frontier. Interest rate margins on the Term Loan A and Revolver (ranging from 0.75% to 1.75% for Base Rate borrowings and 1.75% to 2.75% for LIBOR borrowings) are subject to adjustment based on Frontier’s Total Leverage Ratio (as defined in the JPM Credit Agreement). The interest rate on the Term Loan A as of June 30, 2018 was LIBOR plus 2.75%. Interest rate margins on the Term Loan B (2.75% for Base Rate borrowings and 3.75% for LIBOR borrowings) are not subject to adjustment. The security package under the JPM Credit Agreement includes pledges of the equity interests in certain Frontier subsidiaries and guaranties by certain Frontier subsidiaries. As of June 30, 2018, the company had no borrowings outstanding under the revolver (with letters of credit issued under the revolver totaling $62 million).

CoBank Credit Facilities

As of June 30, 2018, Frontier had two senior secured credit agreements with CoBank, ACB, as administrative agent, lead arranger and a lender, and the other lenders party thereto: (i) a $350 million senior term loan facility drawn in 2014 (the 2014 CoBank Credit Agreement), and (ii) a $315 million senior term loan facility drawn in October 2016 (the 2016 CoBank Credit Agreement), which matures on October 12, 2021. We refer to the 2014 CoBank Credit Agreement and the 2016 CoBank Credit Agreement collectively as the CoBank Credit Agreements.

On March 29, 2017, Frontier amended the CoBank Credit Agreements to provide for increases in the maximum Leverage Ratio and expansion of the security package identical to those contained in the JPM Credit Agreement. On January 25, 2018 Frontier amended the CoBank Credit Agreements to, among other things, expand the security package to include the interests of certain subsidiaries previously not pledged and replace the net leverage ratio maintenance test with a first lien net leverage ratio maintenance test.

Borrowings under each of the CoBank Credit Agreements bear interest based on the margins over the Base Rate (as defined in the applicable CoBank Credit Agreement) or over LIBOR, at the election of Frontier. Interest rate margins under each of these facilities will range from 0.875% to 3.875% for Base Rate borrowings and 1.875% to 4.875% for LIBOR borrowings, subject to adjustment based on our Total Leverage Ratio, as defined in each credit agreement. The interest rate on each of the facilities as of June 30, 2018 was the Base Rate plus 3.375%. Following the extinguishment of the 2014 CoBank Credit Agreement and partial repayment of the 2016 CoBank Credit Agreement on July 3, 2018 as described in “Subsequent Events” below, the interest rate on the 2016 CoBank Credit Agreement was reverted to LIBOR plus 4.375%. For June 30, 2018 the Base Rate and one-month LIBOR were 5.0% and 2.09% respectively.

As of June 30, 2018, we were in compliance with all of our indenture and credit facility covenants.

New Debt Issuances:

On March 19, 2018, Frontier completed a private offering of $1,600 million aggregate principal amount of 8.500% Second Lien Secured Notes due 2026 (the “Second Lien Notes”). The Second Lien Notes are guaranteed by each of the Company’s subsidiaries that guarantees its senior secured credit facilities. The guarantees are unsecured obligations of the guarantors and subordinated in right of payment to all of the guarantor’s obligations under the Company’s senior secured credit facilities and certain other permitted future senior indebtedness but equal in right of payment with all other unsubordinated obligations of the guarantors. The Second Lien Notes indenture provides that (a) the aggregate amount of all guaranteed obligations guaranteed by the guarantees are limited and shall not, at any time, exceed the lesser of (x) the principal amount of the Second Lien Notes then outstanding and (y) the Maximum Guarantee Amount (as defined in the Second Lien Notes indenture), and (b) for the avoidance of doubt, nothing in the Second Lien Notes indenture shall, on any date or from time to time, allow the aggregate amount of all such guaranteed obligations guaranteed by the guarantors to cause or result in the Company or any subsidiary violating any indenture governing the Company’s existing senior notes. The Second Lien Notes are secured on a second-priority basis by all the assets that secure Frontier’s obligations under its senior secured credit facilities on a first-priority basis. The collateral securing the Second Lien Notes and the Company’s senior secured credit facilities is limited to the equity interests of certain subsidiaries of the Company and substantially all personal property of Frontier Video Services, Inc. The Second Lien Notes bear interest at a rate of 8.500% per annum and mature on April 1, 2026. Interest on the Second Lien Notes is payable to holders of record semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2018.

Debt Reductions:

During the six months ended June 30, 2018, Frontier used cash on hand for the scheduled retirement of $83 million contractual payments of principal indebtedness and open market purchases of $48 million of 8.125% senior notes due 2018. Additionally, Frontier used cash proceeds from the $1,600 million Second Lien Notes offering and cash on hand to retire an aggregate principal amount of $1,651 million senior unsecured notes prior to maturity, consisting of $447 million of 8.500% senior notes due 2020, $249 million 8.875% senior notes due 2020, $555 million of 6.250% senior notes due 2021, and $400 million of 9.250% senior notes due 2021. During the first six months of 2018, Frontier recorded a gain on early extinguishment of debt of $33 million driven primarily by discounts received on the retirement of certain notes, slightly offset by premiums paid to retire certain notes and unamortized original issuance costs.

Subsequent Events:

Subsequent to the end of the quarter, on July 3, 2018, Frontier further amended the JPM Credit Agreement and the CoBank Credit Agreements. Among other things, the amendments replace certain operating subsidiary equity pledges with pledges of the equity interests of certain direct subsidiaries of Frontier. Corresponding changes were made to the collateral package securing the Second Lien Notes.

In addition, on July 3, 2018, the Company entered into Increase Joinder No. 2 to the JPM Credit Agreement, pursuant to which the Company borrowed an incremental $240 million under the Term Loan B maturing in 2024. The Company used the incremental borrowings to repay in full the 2014 CoBank Credit Agreement, repay a portion of the 2016 CoBank Credit Agreement and pay certain fees and expenses related to this incremental borrowing. As a result of the extinguishment of the 2014 CoBank Credit Facility and partial repayment of the 2016 CoBank Credit Facility as described above, we reclassified $197 million to “Long-term debt due within one year” that would have otherwise have been classified as “Long-term debt.”

The table below represents our future principal payments as of June 30, 2018 and as of July 3, 2018. The changes reflect the incremental Term Loan B and the repayment of the CoBank Credit Agreements as discussed above.



			Change in
			principal payments
	Principal payments as of		from July 3, 2018		Principal payments as of
($ in millions)	June 30, 2018		activity		July 3, 2018

2018 (remaining six months)	$	740	$	(232)	$	508
2019	$	592	$	3	$	595
2020	$	434	$	3	$	437
2021	$	1,601	$	3	$	1,604
2022	$	2,703	$	3	$	2,706
2023	$	866	$	2	$	868
Thereafter	$	10,744	$	227	$	10,971