On Monday, Shares of Frontier Communications Corporation (NASDAQ:FTR), lost -1.61% to $4.88, hitting its lowest level.
Frontier Communications Corporation, declared that it has closed its formerly declared registered offerings of $750 million of common stock, par value $0.25 per share, at a public offering price of $5.00 per share, and $1.750 billion of 11.125% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share (the “Mandatory Convertible Preferred Stock”), at a public offering price of $100.00 per share. Following the offerings, Frontier has granted the underwriters a 30-day option to purchase from Frontier up to an additional 15,000,000 shares of common stock and up to an additional 1,750,000 shares of Mandatory Convertible Preferred Stock, in each case at the public offering price per share.
Frontier intends to use the proceeds from the offerings to finance a portion of the cash consideration payable in connection with Frontier’s formerly declared acquisition of the wireline operations of Verizon Communications Inc. in California, Florida and Texas and to pay related fees and expenses. The acquisition is predictable to close in the first half of 2016.
Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States.
Shares of NorthStar Realty Finance Corp. (NYSE:NRF), declined -1.35% to $16.87, during its last trading session.
NorthStar Realty Finance, declared that it has reached a definitive agreement to acquire a Class A office tower located in Frankfurt, Germany for €540 million. The Tower is one of the tallest buildings in Germany and is about 68,600 square meters, 98.5% occupied and has a weighted average lease term of about eight years with two tenants rated “AAA” and “A” comprising over 70% of gross rents.
NorthStar Realty anticipates to earn an initial current yield of about 8.0% on its about €250 million of invested equity. The Tower is predictable to be contributed to NorthStar Realty Europe Corp. (“NRE”) at the time of the spin-off from NorthStar Realty. After the completion of this acquisition, NRE will have an aggregate $2.6 billion portfolio, at cost, of high-quality European real estate investments.
NorthStar Realty’s Chairman and Chief Executive Officer, David Hamamoto, commented, “We are extremely happy with the addition of this iconic office tower to our fast growing pan-European portfolio. This transaction emphasizes NorthStar Asset Administration Group’s strong global business platform and ability to be nimble and dynamic, where speed of execution played a crucial role in the acquisition.”
Mr. Hamamoto continued, “We believe this prominent office tower will be a great addition to NRE given its strong fundamentals, counting being one of a very limited number of buildings in Frankfurt with greater than 40 floors, which demand premium rents in the market.”
NorthStar Realty Finance Corp. is a diversified commercial real estate company that is organized as a REIT. NorthStar Realty is managed by an associate of NorthStar Asset Administration Group Inc. (NSAM), a global asset administration firm.
Finally, Key Energy Services Inc. (NYSE:KEG), ended its last trade with -2.49% loss, and closed at $1.96.
Key Energy Services, declared that it has closed a $100 million asset-based revolving credit facility due February 2020 and closed and funded a $315 million term loan facility due June 2020. The Facilities replace Key’s existing $400 million senior revolving credit facility.
The Facilities do not have cash flow based financial maintenance covenants; however, the Facilities require Key to maintain $100 million in liquidity, counting cash and availability under the ABL. Upon closing, Key had $270.6 million of liquidity, assuming the completion of certain post-closing collateral perfection requirements. The Facilities also require Key to maintain the ratio of the net orderly liquidation value of its assets and certain term loan proceeds to term loan borrowings of 1.5x. As of the date of closing, this ratio was 2.15x. The ABL also comprises a fixed charge coverage ratio of 1.0x, which is tested only if excess availability under the ABL falls below a specified threshold or upon the occurrence of certain other events. The term loan was issued at an OID of 3.0% with an annual rate of LIBOR plus 9.25% with a 1.00% LIBOR floor. The ABL bears interest at an annual rate on outstanding borrowings of LIBOR plus 4.5%, with a fee on unused commitments ranging from 1.00% - 1.25% based on utilization. Key plans to file copies of the Facilities with the U.S. Securities and Exchange Commission as exhibits to a Current Report on Form 8-K, and reference should be made to the Facilities for a complete description of their terms.
Commenting on the transaction, Dick Alario, Key’s Chairman, President and Chief Executive Officer stated, “We believe that with the consummation of the refinancing of Key’s existing revolving credit facility, we have secured sufficient liquidity with a favorable covenant structure to navigate the current industry downturn and flexibility with respect to our on-going Foreign Corrupt Practices Act investigation.”
Bank of America Merrill Lynch acted as the Sole Lead Arranger of the term loan facility and Bank of America Merrill Lynch and Wells Fargo acted as Joint Lead Arrangers on the ABL.
Key Energy Services, Inc. operates as an onshore rig-based well servicing contractor in the United States and internationally. It offers rig-based services, counting the maintenance, workover, and recompletion of existing oil wells; completion of newly-drilled wells; and plugging and abandonment of wells at the end of their lives, in addition to specialty drilling services to oil and natural gas producers.
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