Regulators to reconsider $2.35b Verizon deal today

March 30, 2008|Associated Press

CONCORD, N.H. - New Hampshire and Vermont regulators will hold separate emergency meetings today to reconsider Verizon's $2.35 billion sale of its voice and Internet land lines in northern New England.

When the buyer, North Carolina-based FairPoint Communications, tried this week to sell $550 million in bonds to help finance the purchase, the best interest rate it could get was 13.5 percent, said Donald Kreis, general counsel for the New Hampshire Public Utilities Commission.

When the commission approved the sale in February, it believed FairPoint showed the deal was for the public good, and the anticipated interest rate was 8.5 percent, Kreis said.

The higher rate will cost FairPoint $17 million more per year in interest payments on the 10-year bonds, he said. "It does affect the financing significantly in our case," Kreis said.

FairPoint and Verizon hope to close the deal tomorrow.

Maine, Vermont, and the Federal Communications Commission have approved the deal. Maine regulators accepted the financing changes, but Vermont regulators want to take another look, said Stephen Wark, a spokesman for the Vermont Public Service Department. "The department will be closely analyzing the impact they could have on FairPoint's ability to meet its obligations in Vermont."

FairPoint did not immediately return a call for comment Friday.

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