Verizon Communications Inc. (NYSE: VZ) has secured $10 billion in short-term bank financing to support its acquisition of Frontier Communications Parent Inc., according to Bloomberg. Morgan Stanley is leading the consortium of banks providing the funding through a bridge loan, which is a temporary solution typically used for mergers and acquisitions. This type of loan will later be replaced by more permanent financing, such as investment-grade bonds issued to institutional investors.
Verizon announced its intention to purchase Frontier Communications (NASDAQ: FYBR) for approximately $9.59 billion, aiming to bolster its high-speed internet business by acquiring more fiber-optic assets. This move comes as telecommunications companies like Verizon seek to meet the growing demand for data, particularly with the increasing adoption of technologies like artificial intelligence.
Both Verizon and Frontier have not commented on the matter, and the deal is expected to be completed within about 18 months, pending approval from regulators and Frontier’s shareholders.
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