Given the scarcity of AUD bonds, we’ve added two new Frontier Communications and one McDermott International fixed rate bonds to our USD DirectBonds list. The DirectBonds offer indicative yield to worsts up to 10.02% and are available to wholesale investors in minimum face value parcels of USD10,000
Frontier Communications Inc. (Frontier)
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 wireline 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 USD bonds are fixed rate and available to wholesale clients only, in minimum face value parcels of USD10,000 and USD1,000 denominations thereafter.
| Securities | Rank | Next call date | Maturity date | Yield to worst* | Factsheet PDF |
| Frontier Communications Inc. USD January 2023 | Senior unsecured | Make whole at 50 basis points over the relevant treasury yield until 15 January 2023 | 15 January 2023 | 8.42% | Factsheet
|
| Frontier Communications Inc. USD September 2025 | 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 | 10.02% | Factsheet
|
Pricing is indicative as at 17 January 2017 but subject to change.
McDermott International (MDR)
McDermott International (MDR) provides integrated engineering, procurement, construction and installation (EPCI) services for upstream oil and gas field developments worldwide. The service offering includes fixed and floating production facilities, pipeline installations and subsea systems for offshore oil and gas projects, and relies upon MDR’s fleet of marine vessels, fabrication facilities and engineering offices. MDR’s operations span across approximately 20 countries, with a presence in most major offshore oil and gas producing regions throughout the world.
MDR’s customers include various national oil and gas companies, as well as major integrated and other oil and gas companies. For example, INPEX Operations Australia, Saudi Aramco, PEMEX, Petrobras, Chevron, and Exxon Mobile were reported as some of MDR’s significant customers from 2013 to 2015 (MDR annual report, FY15).
The McDermott USD bond is fixed rate and available to wholesale clients only, in minimum face value parcels of USD10,000 and USD1,000 denominations thereafter.
| Securities | Rank | Next call date | Maturity date | Yield to worst* | Factsheet PDF |
| McDermott International USD May 2021 | Senior secured, second lien | 1 May 2017 at USD104.00; 1 May 2018 at USD102.00;
1 May 2019 at USD100.00 | 1 May 2021 | 5.00% | Factsheet
|
Pricing is indicative as at 17 January 2017 but subject to change.
Please contact your FIIG representative for further details on our recent DirectBonds. Note the factsheets are a summary only and should not be considered as credit research.
*Yield to worst is the lowest yield an investor can expect when investing in a callable bond.