UPDATE 2-ITV gets 54 pct take-up of bond exchange offer
* ITV gets 54 pct take up of bond exchange
* Debt maturity smoothed out
(Adds finance director, trader comment, more detail)
LONDON, June 25 (Reuters) - British broadcaster ITV (ITV.L) said on Thursday that just over half of its bondholders accepted a bond exchange offer that will help reduce its debt pile.
"ITV confirmed today that bondholders holding 54 percent or 268 million euros ($373.4 million) of ITV's 500 million euro 2011 bond have accepted its recent exchange offer," the broadcaster said.
Finance Director Ian Griffiths said the exchange had improved the group's finances for the medium term.
"The success of the offer considerably smoothes our debt repayment schedule over the next five years and halves the level of the bond repayment due in 2011," he said in a statement.
Bondholders who accepted the offer will get about 80 million euros and will receive new bonds with a nominal value of about 188 million euros and a coupon of 10 percent.
Earlier this week, ITV had increased the coupon on the new bonds to 10 percent from 9 percent it had offered originally.
The coupon increase had followed talks with its bondholders. [ID:nLM370415]
The bond exchange gives ITV more time to tackle its debts, which stood at 730 million pounds at the end of 2008.
The broadcaster has been hit by an industry-wide slump in advertising revenues and its debt has fallen into "junk-rated" territory.
"The result is pretty much in line with expectations," said Mark Chapman, analyst at CreditSights. "There was some concern after they had to increase the coupon of a push-back by investors, which seems to have been the case to some degree."
He said the exchange allowed ITV to smoothe out its debt maturity schedule.
"They would probably like to do more in the medium term if there is some willingness from creditors."
Five-year credit default swaps on ITV were about 10 basis points tighter at 465 basis points before the exchange results and there was no market reaction after the results were announced.
"A take-up of about 50 percent is not bad at all," said one trader. "I was expecting something like 10 to 15 percent but then they sweetened the offer a couple of days ago and it has obviously worked."
ITV joins a growing list of companies doing bond exchanges partly to give themselves more time to pay debts and also to take advantage of attractive prices for their bonds.
Dutch retailer Ahold (AHLN.AS), for example, made an exchange offer this week for $690 million of bonds due to mature in 2010.
ITV said the remaining 232 million euros of bonds held by investors that were either ineligible to take part in the exchange or chose not to, would not be affected.
These bonds will mature in 2011.
ITV's next significant bond repayments will be 155 million pounds in 2011, 110 million in 2013 and 126 million in 2014, the company said.
ITV said it had cancelled a 450 million pound revolving credit facility, which had not been drawn on. It was due to expire in 2011.
(Reporting by Jane Merriman, Natalie Harrison and Tom Freke; Editing by Mariam Karouny)
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