Tuesday 18 July 2017 by FIIG Research Company updates

Company updates – Frontier Communications, Pepper Group Limited Trust and Petrobras Global Finance

Its DirectBonds galore this week, with three added to our list – Frontier Communications, Petrobras Global Finance and Pepper Group 

New USD DirectBond – Frontier Communications

Frontier Communications Inc. (Frontier) is the fourth largest incumbent local exchange carrier (ILEC) in the US by revenue, after AT&T, Verizon and CenturyLink. The firm was originally established in 1935 as Citizens Utilities Company, and after various acquisitions became a diversified operator of public utilities, providing services for telecommunications, natural gas, electricity and water in the US. In 1999, the firm started to pursue the strategy of divesting the other utility operations to become a pure play telecoms provider.

In 2000, the company was renamed Citizens Communications Company, providing wireless communications services to rural areas as well as small and medium sized cities and towns across the US, mainly as an ILEC. After acquiring Frontier Corp from Global Crossing Ltd in 2001, the company rebranded the ILEC operations to “Frontier”. In 2008, the company was renamed Frontier Communications Corporation.

The Frontier April 2020 bond is fixed rate and available to wholesale clients only, in minimum face value parcels of USD10,000 and USD1,000 denominations thereafter. Below we list all of the available Frontier DirectBonds.

Security Bond credit rating Rank Next call date Maturity date Yield to worst*
New DirectBond – Frontier Communications Inc. USD April 2020 B2/B+/B+ (Moody’s/S&P/Fitch) Senior unsecured Make whole at 50 basis points over the relevant treasury yield until 15 April 2020
15 April 2020 6.86%
Existing DirectBond – Frontier Communications Inc. USD January 2023 B2/B+/B+ (Moody’s/S&P/Fitch)  Senior unsecured Make whole at 50 basis points over the relevant treasury yield until 15 January 2023
15 January 2023 11.63%
Existing DirectBond – Frontier Communications Inc. USD September 2025 B2/B+/B+ (Moody’s/S&P/Fitch) Senior unsecured

15 June 2025 at USD100.00; 

Make whole at 50 basis points over the relevant treasury yield until 15 June 2025
15 September 2025 12.63%
Source: FIIG Securities
*Accurate as at 18 July 2017 but subject to change; indicative only
Requires a W8-BEN form


Source: FIIG Securities

Accurate as at 18 July 2017 but subject to change

New USD DirectBond – Petrobras Global Finance

Petrobras Global Finance is a wholly owned finance subsidiary of Petrobras, and is incorporated under the laws of The Netherlands as a private company. The entity acts as a special purpose vehicle with the sole purpose of raising borrowings in the capital markets globally.

Petrobras has six primary business segments:
1) Exploration and production (24% of total sales) 
2) Refining, transportation, and marketing (47% of total sales) 
3) Distribution 
4) Gas and power (21% of total sales) 
5) Biofuels
6) International

The Petrobras USD 7.375% fixed rate bond matures on 17 January 2027. The bonds are available to wholesale investors only, in minimum parcels of USD10,000. Below we list all of the available Petrobras DirectBonds.
 
Security Bond credit rating Rank Next call date Maturity date Yield to worst* Factsheet link
New DirectBond – Petrobras Global Finance USD January 2027 B1/BB-/BB
(Moody’s/S&P/Fitch)
Senior unsecured Make whole call at 50bps over the relevant treasury yield until 17 July 2017 17 January 2027 5.93% Factsheet^
Existing DirectBond – Petrobras Global Finance USD May 2023 B1/BB-/BB
(Moody’s/S&P/Fitch)
 Senior unsecured Make whole at 40bps over the relevant treasury yield until maturity with at least 30 days’ notice 20 May 2023 4.80% Factsheet^
Source: FIIG Securities
*Accurate as at 18 July 2017 but subject to change; indicative only


Source: FIIG Securities
Accurate as at 18 July 2017 but subject to change


New DirectBond – Pepper Residential Securities

Pepper Group Limited (Pepper) is a non bank lender providing specialist experience in lending, advisory and asset servicing across the residential and commercial property sectors, as well as in consumer, auto and equipment finance. Pepper is listed among the top 500 companies on the ASX, with over $50.8bn in assets under management as at 31 March 2017.

We have recently made the mortgage backed pass through Class B floating rate notes, issued by Pepper Group Limited Trust as trustee of Pepper Residential Securities Trust No. 18, available as a DirectBond. The AUD notes were issued at a rate of 1M BBSW +2.75% available to wholesale clients only, in minimum face value parcels of AUD100,000 and AUD100,000 denominations thereafter.

Security Type Final maturity date
Pepper Group Limited Trust Class B notes Floating rate – 1M BBSW +2.75% August 2058



^This content requires a wholesale MyFIIG login.

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