Romanian telco and DTH provider RCS&RDS is planning a €350m (US$481m) senior bond issue due 2020 to refinance debt.
The notes, proposed by controlling shareholder Cable Communications Systems (CCS), will be used along with a new €300m bank…
Romanian telco and DTH provider RCS&RDS is planning a €350m (US$481m) senior bond issue due 2020 to refinance debt.
The notes, proposed by controlling shareholder Cable Communications Systems (CCS), will be used along with a new €300m bank facility.
JP Morgan is global coordinator, with arrangers Erste Group, Societe Generale and Unicredit, according to Romanian news agency Mediafax citing banking sources.
The transaction will hit foreign markets on 29 October, added the report.
Moody’s has assigned a provisional a (P)B1 rating to the proposed notes, and also a provisional (P)B1 on CCS in the first time it has graded the group. CCS is majority owned by Romanian businessman Zoltan Teszari.
Ivan Palacios, lead analyst for RCS&RDS at Moody’s, said the rating reflects its strong market positions within the Romanian and Hungarian satellite and cable TV, internet and telephony markets now that a large investment phase is over.
The company has historically reported negative free cash flow generation because of these high investment levels, but Palacios said that it currently holds a stable financial profile and will have an improved debt maturity profile following plans to refinance.
It reported €629m in revenues for the year to 30 June 2013, and EBITDA of €258m. For 2012 its debt/EBITDA, as adjusted by Moody’s, was around 4.0x.
“At the same time, the rating also reflects RCS & RDS’s relatively smaller size compared with its similarly rated peer group, the highly competitive environment in which it operates, and the company’s concentration in Romania, despite some geographical diversification,” added Palacios.
According to Moody’s, around three quarters of RCS & RDS’ consolidated EBITDA comes from Romania, exposing it to emerging market risks.
Standard & Poor’s rated the proposed bond B+.
