Frontier Communications presentation at conference
The CFO of Frontier Communications (FTR US, NR, CS fundamental credit view: Negative) gave some early assessment of the impact of the hurricanes in Texas and Florida. In Texas, FTR believes repairs to the network will cost up to USD 20 m.
In Florida, the damage appears to be much smaller, although it remains early days, with still about half of the customers without power. Away from this, the company remains on track with its cost cutting target (USD 1.6 bn) and is working towards a run-rate EBITDA of USD 3.8 bn p.a., aiming for USD 950 m in Q4. Finally, the CFO highlighted again the need to reduce leverage to below 4x EBITDA. We continue to view FTR bonds as a high-risk investment, and although the company’s liquidity situation is satisfactory for now, we recommend that investors reduce positions over time.