Frontier Communications has its Western Washington headquarters in Everett. (Sue Misao / The Herald)

Frontier Communications has its Western Washington headquarters in Everett. (Sue Misao / The Herald)

Frontier Communications seeks March bankruptcy, sources say

The company reportedly has $356 million of debt payments coming due March 15.

By Allison McNeely, Katherine Doherty and Sridhar Natarajan / Bloomberg

Frontier Communications Corp. is asking creditors to help craft a turnaround deal that includes filing for bankruptcy by the middle of March, according to people with knowledge of the matter.

Frontier is the provider of telecom services in 29 states. The company’s Western Washington headquarters is in Everett.

Company executives including Bernie Han, Frontier’s new chief executive officer, met with creditors and advisers Thursday and told them the company wants to negotiate a pre-packaged agreement before $356 million of debt payments come due March 15, the people said. They asked not to be identified because the meeting was private.

Certain Frontier creditors signed confidentiality documents that restrict their ability to trade in preparation for the negotiations, the people said.

A representative for Frontier declined to comment. Such deals typically involve a Chapter 11 bankruptcy, which would allow the company to keep operating without interruption of telephone and broadband service to its customers.

Frontier’s 9% unsecured notes due in August 2031 dropped 1.5 cents on the dollar to 43 cents, according to Trace bond trading data, pushing the yield to nearly 24%. The shares were little changed at 68 cents each at 9:37 a.m. in New York.

A Frontier bankruptcy would rank as one of the biggest telecom reorganizations since Worldcom Inc. in 2002. Frontier has been in talks with advisers about possible solutions to its $17.5 billion debt load, which has become a heavy burden as people stop using land lines.

Frontier is in the process of selling its Northwest assets — broadband services in Washington, Oregon, Idaho and Montana — to Kirkland-based WaveDivision Capital for $1.36 billion. In Washington, Frontier serves customers in Snohomish, Skagit and Whatcom counties and eastern portions of the state. The deal is making its way through the state and federal regulatory process.

Creditors have been pushing Frontier for a restructuring plan, and the Norwalk, Connecticut-based company has warned that bankruptcy might be the result.

A group of creditors including Elliott Management Corp. and Franklin Resources Inc. held nearly 50% of the company’s bonds and organized with law firm Akin Gump Strauss Hauer & Feld LLP and investment bank Ducera Partners LLC, Bloomberg previously reported.

A separate group of creditors including GoldenTree Asset Management LP organized with Houlihan Lokey Inc. and Milbank LLP. Frontier is getting advice from Kirkland & Ellis LLP and Evercore Inc.

Talk to us

More in Herald Business Journal

The strip-mall site (bottom) where Trent Development hopes to build 350 studio, one-bedroom and two-bedroom apartments, on Wednesday, Jan. 20, 2020 in Lynnwood, Wa. (Olivia Vanni / The Herald)
Hundreds more apartments planned around Lynnwood light rail

In a new proposal, a developer envisions 350 units, two buildings of at least seven stories, a one-acre courtyard and a dog spa.

Roei Ganzarski, CEO of magniX, poses with a production electric engine, the magni500, at the  company's new office on Seaway Boulevard on Monday, Jan. 18, 2020 in Everett, Washington.  (Andy Bronson / The Herald)
Electric aircraft developer magniX moves HQ to Everett

The company builds electric motors, and it’s teaming with Arlington’s Eviation to launch a fully electric plane.

Our readers have voted on a few of their favorite things in Snohomish County. (Getty Images)
The best in Snohomish County, chosen by you

Even during a pandemic, people still have their favorites.

FILE - In this Jan. 24, 2019 file photo Washington Gov. Jay Inslee, left, looks on as Suzi LeVine, right, the state's Employment Security Department Commissioner, talks to reporters at the Capitol in Olympia, Wash. The state of Washington is calling in the National Guard to help process unemployment benefit claims as officials grapple with a backlog caused in part by a fraud ring that stole more than half a billion dollars in aid, officials said Thursday, June 11, 2020. LeVine said that Gov. Jay Inslee approved the deployment of troops who will start assisting her team next week as it tries to reduce the unemployment claim backlog.(AP Photo/Ted S. Warren,File)
Head of state employment agency to join Biden administration

Suzi LeVine’s departure is effective Feb. 1. A deputy, Cami Feek, will serve as acting commissioner.

Matt and Jill Wurst opened Audacity Brewing in December 2020 and are now managing to stay open, with the COVID-19 restrictions on businesses, at their brewery on 10th Street on Monday, Jan. 11, 2020 in Snohomish, Washington.  (Andy Bronson / The Herald)
It took some Audacity to open this new Snohomish brewery

The COVID-19 pandemic hit just as Matt and Jill Wurst were getting the business off the ground.

FILE- In this Sept. 30, 202, file photo, a Boeing 737 Max jet, piloted by Federal Aviation Administration (FAA) chief Steve Dickson, prepares to land at Boeing Field following a test flight in Seattle.  (AP Photo/Elaine Thompson, File)
European aviation agency: 737 Max to be cleared next week

The review of the aircraft “began with the MCAS but went far beyond.”

FILE - In this Wednesday, Nov. 18, 2020 file photo, workers stand near a Boeing 737 Max airplane parked at Renton Municipal Airport next to the Boeing assembly facility in Renton, Wash., where 737 Max airplanes are made. On Tuesday, Jan. 12, 2021, the company reported final 2020 numbers for airplane orders and deliveries, and they are down from 2019 even though the 737 Max is flying again. (AP Photo/Ted S. Warren)
Canada OKs return of Boeing 737 Max aircraft

The planes will be permitted to fly as long as they meet specific safety conditions.

Garry Clark
Economic Alliance Snohomish County names new CEO

After nationwide search, Garry Clark, a Nebraska business advocate, will take the helm in February.

Snohomish Delivers concierge Sarah Dylan Jensen picks up tea from Everything Tea on Tuesday, Jan. 5, 2020 in Snohomish, Wa. (Olivia Vanni / The Herald)
A Snohomish service brings goods from the store to your door

Developed by the city, Snohomish Delivers encourages online shoppers to look local. And it’s free.

Arthur Sepulveda, 32, has been looking for his first home since July. He put in bids for four houses and finally found one last month in Lynnwood directly from the builder. (Kevin Clark / The Herald)
Low mortgage rates fuel a frenzied, revved-up housing market

Home prices are soaring and bidding wars are back, and Snohomish County “Zoom towns” are hot locations.

Adam Ling works securing rebar reinforcement for a set of stairs on Tuesday, Jan. 5, 2020 in Lynnwood, Wa. (Olivia Vanni / The Herald)
With lots of people working at home, a rush for renovations

Homeowners with remodeling plans are keeping local contractors busy. Winter hasn’t slowed them down.

FILE - In this Wednesday, Nov. 18, 2020 file photo, workers stand near a Boeing 737 Max airplane parked at Renton Municipal Airport next to the Boeing assembly facility in Renton, Wash., where 737 Max airplanes are made. On Tuesday, Jan. 12, 2021, the company reported final 2020 numbers for airplane orders and deliveries, and they are down from 2019 even though the 737 Max is flying again. (AP Photo/Ted S. Warren)
Boeing deliveries drop despite 737 Max’s return to flight

The company has borrowed billions and cut thousands of jobs to reduce costs.