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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Item 1.01. |
Entry into a Material Definitive Agreement.
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the Company Parties’ obtaining confirmation of the Plan, which shall be on terms consistent with the Restructuring Support Agreement and the Term Sheet, no later than 120
calendar days after the Petition Date (as defined herein);
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the Company Parties using commercially reasonable efforts to obtain commitments on the best available terms for a senior secured superpriority debtor-in-possession financing
facility (the “DIP Facility”), with an option for conversion into an Exit Facility (as defined below) on the Plan effective date (“Plan Effective Date”), on terms and conditions (including as to principal amount) reasonably acceptable
to the Company Parties and reasonably acceptable to the Consenting Noteholders, as of the relevant date, holding greater than 50.1% of the aggregate outstanding principal amount of the Company’s senior unsecured notes and debentures
(the “Senior Notes”) that are subject to the Restructuring Support Agreement (the “Required Consenting Noteholders”);
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one or more third-party debt facilities (“Exit Facilities”), to be entered into on the Plan Effective Date, in an amount reasonably sufficient to facilitate Plan distributions
and ensure incremental liquidity on the Plan Effective Date, and otherwise be on terms and conditions (including as to amount) reasonably acceptable to the Company Parties and reasonably acceptable to the Required Consenting
Noteholders;
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to the extent not converted into an Exit Facility, full satisfaction in cash on the Plan Effective Date of all DIP Facility claims;
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issuance by one or more of the Company Parties of takeback debt (the “Takeback Debt”), in a principal amount of $750 million, subject to downward adjustment and certain other
terms set forth in the Term Sheet, including, but not limited to:
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an interest rate (a) no more than 250 basis points higher than the interest rate of the next more junior secured debt facility to be entered into on the Plan Effective Date if
the Takeback Debt is secured on a third lien basis or (b) no more than 350 basis points higher than the interest rate of the most junior secured debt facility to be entered into on the Plan Effective Date if the Takeback Debt is
unsecured;
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a maturity no less than one year outside of the longest-dated debt facility to be entered into on the Plan Effective Date, subject to an outside maturity date of eight years
from the Plan Effective Date;
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(i) to the extent the Second Lien Notes (as defined below) are reinstated under the Plan, providing the Takeback Debt will be third lien debt, or (ii) to the extent the Second
Lien Notes are paid in full in cash during the pendency of the Chapter 11 Cases or under the Plan, providing the Company Parties and the Required Consenting Noteholders will agree on whether the Takeback Debt will be secured or
unsecured, subject to certain conditions; and
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all other terms including, without limitation, covenants and governance, shall be reasonably acceptable to the Company Parties and the Required Consenting Noteholders; provided that such terms shall not be more restrictive than those in the indenture for the Second Lien Notes.
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subject to acceptance of the Plan by the holders of the Senior Notes, a cash payment (the “Incremental Payments”) on the Plan Effective Date to each holder of the Senior Notes
(to the extent of the available amount of unrestricted balance sheet cash in excess of $150 million on the Plan Effective Date as projected 30 days prior to the anticipated Plan Effective Date, subject to adjustments set forth in the
Term Sheet (“Excess Cash”));
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cash interest payments for the Company’s $850 million secured revolving credit facility (the “Revolver”) maturing on February 27, 2024 and, to the extent not already satisfied
in full during the Chapter 11 Cases from the proceeds of the DIP Facility, satisfaction in full on the Plan Effective Date of all Revolver claims;
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cash interest payments for (i) the Company’s $1,740 million senior secured Term Loan B facility (the “Term Loan B”) maturing on June 15, 2024, and (ii) the Company’s $1,650
million aggregate principal amount of 8.000% First Lien Secured Notes due 2027 (the “First Lien Notes”), as applicable, at non-default rate during the Chapter 11 Cases, which shall not include any make-whole payments, until repayment or
reinstatement of such indebtedness;
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upon mutual agreement among the Company Parties and the Required Consenting Noteholders, for the $1,600 million aggregate principal amount of 8.500% Second Lien Secured Notes
due 2026 (the “Second Lien Notes” and, together with the First Lien Notes, the “Secured Notes”), (i) cash interest payment at non-default rate during the Chapter 11 Cases, which shall not include any make-whole payments, until repayment
or reinstatement of the Second Lien Notes or (ii) payment of accrued non-default rate interest on the Plan Effective Date, which shall not include any make-whole payments, and no cash interest payment during the Chapter 11 Cases;
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to the extent not already satisfied in full during the Chapter 11 Cases from the proceeds of the DIP Facility, (i) satisfaction in full of all Term Loan B claims and all
Secured Notes claims on the Plan Effective Date, or (ii) solely in the event the Company Parties cannot procure financing on terms acceptable to the Company Parties and the Required Consenting Noteholders to repay in full the Term Loan
B or the Secured Notes, as applicable, reinstatement of all Term Loan B claim and all Secured Notes claims, as applicable, pursuant to section 1124 of the Bankruptcy Code on the Plan Effective Date;
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cash interest payments at non-default rate during the Chapter 11 Cases for the secured and unsecured notes of the Company’s subsidiaries and, on or as soon as reasonably
practicable following the Plan Effective Date, reinstatement of such notes pursuant to section 1124 of the Bankruptcy Code;
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cash payment in full of all general unsecured claims (other than Parent Litigation Claims (as defined below)), if applicable, that are not Senior Notes claims or subsidiary
unsecured notes claims, reinstatement of such claims pursuant to section 1124 of the Bankruptcy Code or other such treatment rendering such claims unimpaired, in each case, as reasonably acceptable to the Company Parties and the
Required Consenting Noteholders;
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litigation-related claims against the Company that would be subject to the automatic stay (except those subject to the police and regulatory exception) (the “Parent Litigation
Claims”) will be unimpaired, provided that the Parent Litigation Claims will be allowed in an amount that does not exceed existing insurance coverage plus $25 million;
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cash payment in full of all administrative expense claims, priority tax claims, other priority claims, and other secured claims or other such treatment rendering such claims
unimpaired, including reinstatement pursuant to section 1124 of the Bankruptcy Code or delivery of the collateral securing any such secured claim and payment of any interest required under section 506(b) of the Bankruptcy Code;
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a motion, promptly after the commencement of the Chapter 11 Cases, filed by the Company Parties to assume the Purchase Agreement (the “Purchase Agreement”), dated as of May 28,
2019, among the Company, Frontier Communications ILEC Holdings LLC, and Northwest Fiber, LLC, as amended, restated, amended and restated, or otherwise modified from time to time, and close the sale of the Company’s operations and
associated assets in Washington, Oregon, Idaho and Montana, subject to certain terms and conditions in the Purchase Agreement, as soon as reasonably practicable;
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on or as soon as reasonably practicable following the Plan Effective Date, receipt by the holders of the Senior Notes, in full satisfaction of their claims, their pro rata
share of (a) 100% of the common equity (the “New Common Stock”) of the Company or an entity formed to indirectly acquire substantially all of the assets and/or stock of the Company as may be contemplated by the Restructuring (the
“Reorganized Company”), subject to dilution by the Management Incentive Plan (as defined below), (b) the Takeback Debt and (c) any surplus cash remaining after payments of the Incremental Payments;
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on the Plan Effective Date, reservation of a pool (the “Management Incentive Plan Pool”) of 6% (on a fully diluted basis) of the New Common Stock for a post-emergence
management incentive plan (the “Management Incentive Plan”) for management employees of the Reorganized Company, which will contain terms and conditions as determined at the discretion of the board of directors of the Reorganized
Company after the Plan Effective Date; provided that up to 50% of the Management Incentive Plan Pool may be allocated prior to the Plan Effective Date as emergence grants (“Emergence Awards”) to individuals selected to service in key
senior management positions after the Plan Effective Date; provided, further, that the Emergence Awards will have terms and conditions that are acceptable to the Company Parties and the Required Consenting Noteholders;
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no distribution for existing equity interests; and
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in the event the Required Consenting Noteholders and the Debtors determine that the New Common Stock should be listed on a recognized U.S. stock exchange, commercially
reasonable efforts by the Reorganized Company to have the New Common Stock listed on a recognized U.S. stock exchange as promptly as reasonably practicable on or after the Plan Effective Date, and prior to any such listing, commercially
reasonable efforts to qualify its shares for trading in the pink sheets.
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Item 1.03. |
Bankruptcy or Receivership.
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Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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Item 2.04. |
Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
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the First Amended and Restated Credit Agreement, dated as of February 27, 2017, among Frontier, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent, as amended, restated, amended and restated, supplemented and otherwise modified, and the $749 million (with letters of credit approximately totaling an additional $101 million) outstanding under the Revolver and the approximately
$1,695 million outstanding under the Term Loan B;
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the Fourth Supplemental Indenture, dated October 1, 1994, to the Indenture of Securities, dated as of August 15, 1991, between Frontier and JPMorgan Chase Bank, N.A. (as
successor to Chemical Bank), as Trustee (the “August 1991 Indenture”), between Frontier and JPMorgan Chase Bank, N.A. (as successor to Chemical Bank), as trustee, and the approximately $1 million aggregate outstanding principal amount
of Frontier’s 7.68% Debentures due 2034 issued thereunder;
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the Fifth Supplemental Indenture to the August 1991 Indenture, dated as of June 15, 1995, between Frontier and JPMorgan Chase Bank, N.A. (as successor to Chemical Bank), as
trustee, and the $125 million aggregate outstanding principal amount of Frontier’s 7.45% Debentures due 2034 issued thereunder;
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the Sixth Supplemental Indenture to the August 1991 Indenture, dated as of October 15, 1995, between Frontier and JPMorgan Chase Bank, N.A. (as successor to Chemical Bank), as
trustee, and the $138 million aggregate outstanding principal amount of Frontier’s 7% Debentures due 2025 issued thereunder;
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the Seventh Supplemental Indenture to the August 1991 Indenture, dated as of June 1, 1996, between Frontier and JPMorgan Chase Bank, N.A. (as successor to Chemical Bank), as
trustee, and the approximately $2 million aggregate outstanding principal amount of Frontier’s 6.8% Debentures due 2026 issued thereunder;
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the Eighth Supplemental Indenture to the August 1991 Indenture, dated as of December 1, 1996, between Frontier and JPMorgan Chase Bank, N.A. (as successor to Chemical Bank), as
trustee, and the $193.5 million aggregate outstanding principal amount of Frontier’s 7.05% Debentures due 2046 issued thereunder;
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the Indenture, dated as of August 16, 2001, between Frontier and JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as trustee, and the approximately $945
million aggregate outstanding principal amount of Frontier’s 9% Senior Notes due 2031 issued thereunder;
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the Indenture, dated as of December 22, 2006, between Frontier and The Bank of New York, as trustee, and the approximately $346 million aggregate outstanding principal amount
of Frontier’s 7.875% Senior Notes due 2027 issued thereunder;
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the Third Supplemental Indenture, dated as of May 22, 2012, to the Indenture dated as of April 9, 2009, between Frontier and The Bank of New York Mellon, as trustee (the “April
2009 Indenture”), between Frontier and The Bank of New York Mellon, as trustee, and the approximately $89 million aggregate outstanding principal amount of Frontier’s 9.25% Senior Notes due 2021 issued thereunder;
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the Fourth Supplemental Indenture to the April 2009 Indenture, dated as of August 15, 2012, between Frontier and The Bank of New York Mellon, as trustee, as amended, and the
$850 million aggregate outstanding principal amount of Frontier’s 7.125% Senior Notes due 2023 issued thereunder;
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the Fifth Supplemental Indenture to the April 2009 Indenture, dated as of April 10, 2013, between Frontier and The Bank of New York Mellon, as trustee, and the $750 million
aggregate outstanding principal amount of Frontier’s 7.625% Senior Notes due 2024 issued thereunder;
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the Sixth Supplemental Indenture to the April 2009 Indenture, dated as of September 17, 2014, between Frontier and The Bank of New York Mellon, as trustee, and the
approximately $220 million aggregate outstanding principal amount of Frontier’s 6.250% Senior Notes due 2021 issued thereunder;
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the Seventh Supplemental Indenture to the April 2009 Indenture, dated as of September 17, 2014, between Frontier and The Bank of New York Mellon, as trustee, and the $775
million aggregate outstanding principal amount of Frontier’s 6.875% Senior Notes due 2025 issued thereunder;
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the First Supplemental Indenture, dated as of July 1, 2010, to the Indenture, dated as of April 12, 2010, as amended, between New Communications Holdings Inc. and The Bank of
New York Mellon, as trustee, between Frontier and The Bank of New York Mellon, as trustee, and the approximately $172 million aggregate outstanding principal amount of Frontier’s 8.5% Senior Notes due 2020 and the $500 million aggregate
outstanding principal amount of Frontier’s 8.75% Senior Notes due 2022 issued thereunder;
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the First Supplemental Indenture, dated as of September 25, 2015, to the Base Indenture, dated as of September 25, 2015 (the “2015 Base Indenture”), between Frontier and The
Bank of New York Mellon, as trustee, between Frontier and The Bank of New York Mellon, as trustee, as supplemented, and the approximately $55 million aggregate outstanding principal amount of Frontier’s 8.875% Senior Notes due 2020
issued thereunder;
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the Second Supplemental Indenture to the 2015 Base Indenture, dated as of September 25, 2015, between Frontier and The Bank of New York Mellon, as trustee, and the
approximately $2,188 million aggregate outstanding principal amount of Frontier’s 10.500% Senior Notes due 2022 issued thereunder;
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the Third Supplemental Indenture to the 2015 Base Indenture, dated as of September 25, 2015, between Frontier and The Bank of New York Mellon, as trustee, and the $3,600
million aggregate outstanding principal amount of Frontier’s 11.000% Senior Notes due 2025 issued thereunder;
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the Indenture, dated as of March 19, 2018, by and among, Frontier, the guarantors party thereto and Wilmington Savings Fund Society FSB (“WSFS”), as successor trustee and
successor collateral agent, and the $1,600 million aggregate outstanding principal amount of the Second Lien Notes issued thereunder;
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the Indenture, dated as of March 15, 2019, by and among Frontier, the guarantors party thereto, the grantor party thereto, JPMorgan Chase Bank, N.A., as collateral agent, and
Wilmington Trust, National Association (“WTNA”), as successor trustee, and the $1,650 million aggregate outstanding principal amount of the First Lien Notes issued thereunder;
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the Trust Indenture, dated as of January 1, 1994, the First Supplemental Indenture, dated as of May 1, 1996, each between Frontier North Inc. (formerly GTE North Incorporated)
(“Frontier North”) and U.S. Bank National Association (“U.S. Bank”), as successor trustee, and the $200 million aggregate outstanding principal amount of Frontier North’s 6.73% Debenture due 2028 issued thereunder (the “Frontier North
Debentures”);
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the Indenture, dated as of June 1, 1940, the Thirty-Eighth Supplemental Indenture, dated as of November 15, 1991, and the Thirty-Ninth Supplemental Indenture, dated as of March
25, 2008, each between Frontier Southwest Incorporated (formerly Southwestern Associated Telephone Company) (“Frontier Southwest”) and BOKF, NA, as successor trustee, and the $100 million aggregate outstanding principal amount of
Frontier Southwest’s 8.5% First Mortgage Bonds due 2031 issued thereunder (the “Frontier Southwest First Mortgage Bonds”);
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the Indenture, dated as of December 1, 1993, between Frontier California Inc. (formerly GTE California Incorporated) (“Frontier California”) and Bank of America National Trust
and Savings Association, as trustee (the “California Indenture”), the First Supplemental Indenture to the California Indenture, dated as of April 15, 1996, between Frontier California and First Trust of California, National Association,
as trustee, and the $200 million aggregate outstanding principal amount of 6.750% Debentures due 2027 issued thereunder; and
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the Trust Indenture, dated as of November 1, 1993, the First Supplemental Indenture dated as of January 1, 1998, each between Frontier Florida LLC (formerly GTE Florida
Incorporated) (“Frontier Florida”) and U.S. Bank, as successor trustee, and the $300 million outstanding aggregate principal amount of 6.86% Debentures due 2028 issued thereunder (the “Frontier Florida Debentures”).
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Item 7.01 |
Regulation FD Disclosure
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Item 8.01 |
Other Events.
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Item 9.01 |
Financial Statements and Exhibits.
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(d) |
Exhibits.
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Exhibit
No.
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Description
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Restructuring Support Agreement, dated as of April 14, 2020, by and among the Company Parties and the Consenting Noteholders.
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Press release, dated as of April 14, 2020.
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Cleansing Materials.
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FRONTIER COMMUNICATIONS CORPORATION
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By:
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/s/ Mark D. Nielsen
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Name: Mark D. Nielsen
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Title: Executive Vice President, Chief Legal Officer and Chief
Transaction Officer
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