UK communications infrastructure firm Arqiva expects to finalise its £3.7bn bond and loan refinancing at the end of February.
The company is launching a road show for bonds worth a total £1.1bn as part of what it anticipates will be the largest…
UK communications infrastructure firm Arqiva expects to finalise its £3.7bn bond and loan refinancing at the end of February.
The company is launching a road show for bonds worth a total £1.1bn as part of what it anticipates will be the largest financing transaction in the UK’s s infrastructure sector this year.
These will comprise a £500m senior bond that has been rated BBB by Standard & Poor’s and Fitch, and a £600m holding company bond that has been rated B- by Fitch and B3 by Moody’s.
Arqiva has also agreed to a £2.5bn committed facility, which will include £1.8bn in term loans and £700m in ancillary facilities.
A spokesperson for the group said on 13 February that it will hold meetings in the UK, US and continental Europe over the next two weeks as the debt will be denominated in a mix of currencies.
The refinancing will also see existing shareholders, the largest of which is the Canada Pension Plan Investment Board with a 48% stake, provide £867m in capital, of which £400m will be fresh financing and the remainder accrued from them not taking dividends since 2009.
Its shareholders’ equity injection was key to reducing Arqiva’s leverage ratio, enabling it to issue the investment grade bonds.
HSBC and Rothschild are advising Arqiva on refinancing the debt, which is supported by a club of 20 banks.
As previously reported, the top tier banks for the refi include RBS, Barclays, HSBC, Lloyds, JP Morgan, Deutsche Bank, BofA Merrill Lynch, UBS and Commerzbank Bank.
Barclays, Dresdner Kleinwort (now part of Commerzbank), HSBC and RBS arranged Arqiva’s existing £3.4bn debt. The original debt, which matures in 2014, was secured by the company’s then majority owner Macquarie to help fund the transformational £2.5bn acquisition of National Grid Wireless in 2007.
The amount of debt it needs to refinance has increased to around £3.7bn primarily because of expensive long-dated interest swaps.
Arqiva provides television, radio, satellite and wireless communications infrastructure in the UK. It also has operations in Ireland, mainland Europe and the US.
The consortium of several shareholder investor groups that own the group also includes the Macquarie European Infrastructure Fund 2, which holds a 25% stake
