Investors Given Black Eye on Frontier's New $1.5 Billion Loan
- Recently sold loan said to trade below Thursday’s issue price
- A drop in price on new debt is rare in frothy market
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Loan investors helped Frontier Communications Corp. raise $1.5 billion this week as the struggling company tries to shore up its balance sheet. Some of them are already regretting it.
The telecom operator’s term loan was sold Thursday and is now trading below its issue level, an unusual occurrence in a hot market where strong demand often leads to a bump in market prices after the debt has been sold. The loan was being quoted below 99 cents on the dollar Friday, according to people who’ve seen the trades. That’s less than the already discounted price of 99.5 cents it was sold at.