Verizon commits $10 billion in debt for Frontier acquisition

(Bloomberg) — Verizon Communications Inc. has provided $10 billion in short-term bank financing to finance its purchase of Frontier Communications Parent Inc., according to people familiar with the matter.

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Morgan Stanley is leading a group of banks in the committed financing, known as a bridge loan, said the people, who asked not to be identified because the details are confidential. Verizon said last month that it aims to complete the acquisition within about 18 months, if approved by regulators and Frontier shareholders.

Bridge loans provided by banks for mergers and acquisitions will eventually be replaced by permanent financing, such as the sale of investment-grade bonds to institutional investors.

A representative for Morgan Stanley declined to comment. Representatives for Verizon and Frontier did not respond to requests for comment.

Verizon agreed last month to acquire telecom operator Frontier for about $9.59 billion to expand its high-speed Internet business. Telecommunications companies like Verizon are building out their fiber assets to accommodate their customers’ increasing data usage. The flow of data is expected to continue to increase as more companies adopt artificial intelligence.

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