October 2, 2017 / 8:50 AM / a year ago

LPC-Altice and SFR launch loan refis totalling €3.657bn

LONDON, Oct 2 (Reuters) - French telecom group Altice and its majority owned telecoms company SFR have both launched cross-border loan refinancings to lower the cost of borrowings and extend maturities, banking sources said on Monday.

Altice is set to raise €1.089bn of leveraged loans split between euros and dollars to refinance existing 2022, 6.5% euro and dollar bonds.

Loans have been attractive compared to bonds for a number of borrowers of late, as loans offer competitive pricing and come without restrictive non-call periods.

The 8.25-year loans are guided to pay 300bp over Euribor/Libor with a 0% floor and a 99.75 OID, and come with 101 soft call for six months.

JP Morgan is leading the euro portion of the loan, while Goldman Sachs is leading the dollars. The other bookrunners are Barclays, BNP Paribas, Credit Suisse and Morgan Stanley,

Corporate ratings are B1 / B+, facility ratings are B1/BB-, with a recovery rating of 2.

Meanwhile, SFR has launched a €2.568bn–equivalent cross-border refinancing that will also increase the size of its loans.

The 8.25-year covenant-lite loan is also guided to pay 300bp over Euribor/Libor with a 0% floor and a 99.75 OID. It is offered with 101 soft-call for six-months.

BNP Paribas is leading the euro portion, while Credit Suisse is leading the dollars. Other banks on the financing are Goldman Sachs, JP Morgan, Morgan Stanley and Barclays.

The loan refinances a €697m TLB10 and a US$1.781bn TLB10, both due in 2025. Those loans were raised in October and pay 300bp over Euribor/Libor, with a 0.75% floor.

SFR’s new loan also refinances €300m of other debt, similar to commercial paper type issuance.

Expected corporate and issue ratings are B1/B+, with a recovery rating of 3.

Both the Altice and SFR loan refinancings will be denominated in euros and dollars, although the exact split has yet to be decided.

Investors on both loans have been asked to commit to the refinancings by October 5, following lender calls on October 3.

In March 2017, Altice completed a US$910m term loan refinancing due in 2025 and at the same time, SFR closed a €1.145bn term loan B11 and a US$1.418bn TLB11, which refinanced debt raised in April 2016.

In August, Reuters reported that Altice, the acquisitive telecoms and cable group founded by billionaire Patrick Drahi, raised its stake in SFR to more than 95% and planned a full buyout offer for the remaining shares.

It also emerged that Altice and its US cable unit were in the early stages of working on an offer to buy Charter Communications Inc.

A deal for Charter would allow Drahi to advance his business model in the United States. He made his fortune through debt-fuelled acquisitions swiftly followed by cost cutting to boost profits.

Bankers are working on debt financings of around US$70bn to back a potential offer by Altice for Charter. (Editing by Christopher Mangham)

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