Frontier Communications Corp. should file for bankruptcy sooner rather than later to get ahead of deterioration of the business and “cracks” in U.S. credit markets, according to Robert Citrone’s hedge fund, Bloomberg News reported. Further delays as the telecom company tries to organize creditors will erode cash and confidence in the business, Discovery Capital Management LLC said in an Oct. 24 letter to Frontier’s board that was reviewed by Bloomberg. Financial markets are pricing in a 99 percent chance that Frontier will file for bankruptcy over the next two years, according to the letter, which was signed by portfolio manager Douglas Ormond and copied to Citrone, founder of the investment firm. Frontier faces dwindling liquidity as “cracks begin to appear in the U.S. credit markets,” and could be in danger of violating terms of its debt, Discovery wrote. The firm represents longtime investors in Frontier.
