Strong demand in European financial markets has prompted Belgian cableco Telenet to ditch plans to tap US debt markets in favour of increasing the size of its planned senior-secured euro bond offering by €200m (US$246.2m) to €700m…
Strong demand in European financial markets has prompted Belgian cableco Telenet to ditch plans to tap US debt markets in favour of increasing the size of its planned senior-secured euro bond offering by €200m (US$246.2m) to €700m (US$861.8m).
Telenet announced on Monday that it intends to take on an extra €700m in euro and dollar debt to fund the buyback of about 18.2% of its own shares via a tender offer. The Liberty Global-controlled cableco said it would take advantage of favourable financial market conditions to issue €500m of senior-secured fixed-rate notes, due 2022, in international debt markets and raise an extra €200m in US dollar debt markets by the end of the year.
However, a Telenet spokesperson said “overwhelming demand” for the 6.375% high-yield notes, to be issued by special purpose vehicle Telenet Finance V Luxembourg, led the company to cancel plans to take out a US term loan and issue two euro-denominated bonds instead.
The offering consists of €450m of senior-secured notes with a 10-year tenure and €250m of senior-secured notes with a 12-year tenure.
“On a swapped basis, the difference between US dollar-denominated paper and euro-denominated paper with long maturities has become marginal, hence the choice for all euro-denominated debt,” the spokesperson said.
JPMorgan Chase, BNP Paribas and Goldman Sachs are financial advisers for the senior-secured notes, Bloomberg reported. Telenet said on Monday Rothschild is managing the tender offer.
The offerings form part of a broader capital restructure and amended shareholder remuneration policy which will see the company increase its total net debt to annualised EBITDA ratio to about 4.5 times, the higher end of its leverage range.
The cableco intends to use the proceeds of the debt financing to fund its proposed share buyback.
“Telenet believes that the combination of the adjustment to the capital structure and the revised shareholder remuneration will allow for a more efficient balance sheet,” the company said on Monday.
