Verizon landline unit to sell senior notes ahead of spinoff, sale to Frontier Communications

Verizon landline unit to sell debt before spinoff

STAMFORD, Conn. — New Communications Holdings Inc., a subsidiary of Verizon Communications Inc. formed as part of a plan to sell its landline operations in 14 states, plans to sell two series of senior notes in a private placement.

Announcement of the notes sale was made Wednesday by Frontier Communications, which reached a deal to buy the landline business from Verizon last May. The companies expect New Communications Holdings to be spun off from Verizon and then immediately combined with Frontier. Frontier’s purchase of the businesses is working its way through regulatory approvals.

The New Communications Holdings debt sale is intended to fund a portion of a special cash payment the unit will make to Verizon in connection with the complicated deal. The gross proceeds of the offering will be deposited into an escrow account until the spinoff and sale takes place.

New Communications will sell a series of senior notes due 2017 and a second series of notes due 2020.

In morning trading, Frontier shares fell 4 cents to $7.46. Verizon shares slipped 36 cents to $30.62.