* Exchange bond coupon now 10 percent, up from 9 percent
* Offers bondholders 70 percent in new bonds, rest in cash
* Shares down 2.8 percent
(Adds detail, analyst comment)
LONDON, June 22 ITV's (ITV.L) bondholders have
won improved terms on the British broadcaster's proposed bond
exchange just two days before the offer closes.
The new bonds will pay a coupon of 10 percent rather than
the 9 percent offered previously, ITV said.
"This sends a fairly challenging signal to the market," said
Mark Chapman, an analyst at CreditSights.
"Since the exchange offer was first announced, market
sentiment has weakened slightly and so investors may have backed
away from the deal a little."
The change followed discussions with "several substantial
holders" of its 2011 bonds, ITV said in a statement.
The exchange offers bondholders about 70 percent of new
bonds maturing in 2014, and about 30 percent cash. The exchange
may cut debt by up to 150 million euros ($208 million), ITV has
The "opportunistic" exchange offer will delay ITV's first
large refinancing demand, allowing it more time to turn around
its business, Chapman at CreditSights said.
ITV has been struggling with an industry-wide slump in
advertising revenue, hitting its share price and sending its
debt into "junk"-rated territory. The company owed 730 million
pounds ($1.2 billion) at the end of 2008.
"The exchange offer should give ITV significantly more
financial flexibility in the medium term, and increases the
practical options open to it," rating agency Fitch said in
response to the initial offer announcement on June 10.
ITV will not expect all eligible bondholders to take up the
exchange offer, said a credit analyst who declined to be named.
"I'm sure they won't get 100 percent, but given the
beneficial effects of the exchange on ITV's balance sheet, even
50 percent would be a good result," the analyst said.
ITV shares were down 2.8 percent at 35 pence at 1440 GMT
(Reporting by Tom Freke; Editing by Dan Lalor)
($1 = 0.7216 euro = 0.6070 pound)