Subsequent Events

12 Months Ended

Dec. 31, 2019

(23)

Subsequent Events:

Restructuring

The Company engaged in discussions with the Unsecured Noteholders with respect to potential deleveraging or restructuring transactions from January 2020 until the expiration of such agreements and corresponding release of certain confidential information on March 27, 2020. These discussions have included negotiations of the terms and conditions of the Restructuring of the existing debt of, existing equity interests in, and certain other obligations of the Company Parties. The Restructuring is currently expected to be effected pursuant to a Plan to be filed in Chapter 11 Cases under the Bankruptcy Code. Although the Company continues to be open to all discussions with the Unsecured Noteholders regarding a potential Restructuring, there can be no assurance we will reach an agreement with the Unsecured Noteholders in a timely manner, on terms that are attractive to us, or at all. The Company expects to continue to provide quality service to its customers without interruption and work with its business partners as usual during the course of these discussions and any potential transaction.

Deferral of Interest Payment to Holders of Certain Senior Unsecured Notes

As of December 31, 2019, the Company had outstanding $55 million aggregate principal amount of 8.875% notes due 2020 (the 2020 notes), $2,188 million aggregate principal amount of 10.500% notes due 2022 (the 2022 notes), $3,600 million aggregate principal amount of 11.000% notes due 2025 (the 2025 notes) and $220 million aggregate principal amount of 6.25% notes due 2021 (collectively with the 2020 notes, the 2022 notes and the 2025 notes, the deferred payment senior notes).

On March 16, 2020, we deferred making $322 million in scheduled interest payments due on the deferred payment senior notes and a 60-day grace period commenced under the indentures governing the deferred payment senior notes. We elected to enter into the grace period in order to collaborate with certain Unsecured Noteholders regarding the Restructuring. If we do not make these interest payments by May 15, 2020 or if we do not make any required principal payments required under the indentures governing our notes, an event of default would occur under the applicable indentures, which would give the trustee or the holders of at least 25% of principal amount the option to accelerate maturity of the principal, plus any accrued and unpaid interest on such notes making them due and payable immediately.

The Company has also elected to defer making scheduled interest payments due on April 1, 2020 with respect to certain of its debentures.

Noncompliance with Nasdaq’s Minimum Bid Price Requirement

On December 16, 2019, the Company was notified by The Nasdaq Stock Market (Nasdaq) that it was not in compliance with Nasdaq’s Listing Rule 5450(a)(1), as the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days.

Under Nasdaq’s rules, the notification of noncompliance had no immediate effect on the listing or trading of Frontier’s common stock on the Nasdaq Global Select Market under the symbol “FTR”. Under Nasdaq’s rules, we were given 180 days, or until June 15, 2020, to achieve compliance with the minimum bid price requirement. To regain compliance, the minimum bid price of Frontier’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days prior to the expiration of the 180-day grace period. Failure to regain compliance during this period could result in delisting. Since we received the notification, our share price has continued to consistently trade under $1.00.

COVID-19 Pandemic

In December 2019, a novel strain of coronavirus, COVID-19, was reported in Wuhan, China. The World Health Organization has declared COVID-19 a pandemic and public health emergency of international concern. In March 2020, the President of the United States declared a State of National Emergency due to the COVID-19 outbreak. Many jurisdictions, particularly in North America (including the United States), Asia and Europe and several states in which we operate, including California, New York, Connecticut and others, have adopted or are considering laws, rules, regulations or decrees intended to address the COVID-19 outbreak, including implementing travel restrictions, closing non-essential businesses and/or restricting daily activities. In addition, many communities have limited, and are considering to further limit, social mobility and gathering. As the COVID-19 pandemic develops, governments, corporations and other authorities may continue to implement restrictions or policies that adversely impact consumer spending, the economy and our business, operations and stock price. Given the unprecedented and evolving nature of the pandemic, the impact of these changes and potential changes on the Company are unknown at this time.

For information on the FFCR Act and the CARES Act, refer to Note 15.