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Frontier Communications Corporation Message Board

  • audphil78 audphil78 Sep 14, 2012 3:44 PM Flag

    P.S. QE3+/Lower Interest Rates for Longer Time, Huge Help to FTR

    The other aspect to a fundamental appraisal of FTR's value is that (as witnessed by their oversubscribed $600mm bond issue recently, which was initially set for $500mm) the BB and BB+ companies of the world can issue huge amounts of debt at reasonable rates so both liquidity and profitability (and cash flow) will be positively impacted.

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    • So much for that idea, FTR is now down 5% since QE3 was announced. Hard to find many that bad.

      Sentiment: Hold

      • 1 Reply to vjpj1110
      • I guess we all have to look on the bright side and trust mgmt.. Well there's a good one. It seems like all doom and gloom but you can't tell me there still isn't a plan. Speaking for myself that's why I am holding on. Sometimes it gets hard to stomach but I keep holding on.. Telecoms were down today .. Next thurs sep 20th 11:20 am might be a good indication of what has been going on. Please don't blame it on the rain, although I am willing to bet it will be mentioned. I am still waiting to hear about some kind of cell phone deal.. The iphone5 just came out, where is the partnership with att or did that fall through. Just speculating but that would be a good addition. I also said before my plan with vz is up, I would like to get a combo package. phone / internet / iphone5/ - hopefully we'll see that and help grow revenue

    • burnaka Sep 14, 2012 4:04 PM Flag

      When they did the bond offering it was to pay off maturing debt. The rate charged for the new debt was a couple of points higher than the old debt. So much for that idea. The good news on debt is that between now and 2014 they should be able to pay it off with cash on hand. The issue here is revenue, ie. it is down every single Q. With only 1 in three under 30 house holds opting for land lines, ftr is ultimately toast. I will keep taking the dividends but will at some point cut bait. I am giving it 6 more months to turn revenue around. If that miraculously happens ftr will get past 5 into the 6-7 range.

      • 2 Replies to burnaka
      • This is an old cow...but the bond issue and the bank line, along with sharply reduced integration and cap-ex should allow them to milk this for many more years and actually increase both operating cash flow, especially free cash flow, and net income for many years even if revenue declines modestly from where it is. There are many businesses just like this that make great investments if you have the right entry point. Clearly those who bought at 8 or 9 and suffered through the two dividend cuts (especially the most recent one which was precipitated by rating agency comments etc. right after it was "vouced for" by Marge) are not (and should not be) happy campers. However those who bought in at 4 and my hunch is up to around 5 will be quite happy with the overall return. Many old cows out there that still give a lot of milk, even if they are looking weaker...United Online (Juno, NetZero, Classmates) is another one and their business outlook is a lot grimmer in terms of revenue declines moving forward.

        Sentiment: Hold

      • Completely agree, Burnaka.

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