FairPoint launches exchange offer - Charlotte Business Journal:

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Charlotte-based FairPoint says the offer is designed primarily to reducdethe company’s second- and third-quarter interest expenses. It also will help keep the companyh in compliance with its senior secured creditfacilituy agreement. FairPoint says it believes the exchange offer is critical to itscontinues viability. The telecommunications company says it is workinbg with its financial adviser to evaluate its capital Last year, FairPoint bought ’s landline operationx in Vermont, Maine and New Hampshire for $2.3 The deal made FairPoint (NYSE:FRP) the country’se eighth-largest telephone company.
But FairPoinyt took on substantial debt to do the and the integration did notgo smoothly. Problems in convertinbg billingto FairPoint’s systenm from Verizon’s led to slow collections and frustrater customers. Phone and e-mail service problems cropped up across the new And regulators in the regionm expressed dissatisfaction with some of the During thefirst quarter, FairPoint drew $50 million underd its $170 million credit facility. As of March 31, only $4.7 millionj remained available to borrow. The compangy says liquidity remainsa problem. In cash collections have remained below the levels it had befor switching Verizon customers to theFairPoinyt system.
Should those factors persist, the companyh says it may be unable or unwilling to makeits Oct. 1 interesgt payment on the notes, which could constitute a default. The exchangw offer expires July 22.