Two affiliates of Cool Holding plan to issue a total of US$1.09bn notes to finance the Israeli holding company’s acquisition of HOT Telecommunication Systems.
Altice Financing will issue US$700m senior secured notes which mature in 2019, while Altice…
Two affiliates of Cool Holding plan to issue a total of US$1.09bn notes to finance the Israeli holding company’s acquisition of HOT Telecommunication Systems.
Altice Financing will issue US$700m senior secured notes which mature in 2019, while Altice Finco will offer US$390m senior notes due 2020.
Cool Holding already owns 69.25% of HOT. As TelecomFinance reported on Monday, owner Patrick Drahi acquired the remaining stake in the telco at NIS42 (US$10.9) per share, valuing the entire company at NIS3.06bn (US$792m).
“Proceeds of the notes will be used by the issuers and Cool Holding, an affiliate of the Issuers, (i) to finance the acquisition by a wholly-owned subsidiary of Cool of the remaining shares of HOT not currently owned by Cool, (ii) to repay certain existing indebtedness of Cool and HOT and (iii) for general corporate purposes,” said the Altice affiliates in a statement today.
Ropes & Gray LLP are advising the issuers on the transaction.
Drahi’s acquisition of the remaining stake in HOT has been a difficult process. As well as Cool Holdings’ bondholders trying to block the purchase, Drahi raised his offer a number of times before the shareholder meeting where the deal was agreed.
Moody’s assigned a provisional Ba2 rating to the US$700m notes and a provisional B2 rating to the US$390m notes today. The outlook on the ratings is stable.
“The ratings on the two proposed bonds take into account the complex capital structure of the transaction, as well as the security granted to the senior secured bond which in effect is capped at NIS1.9bn (US$491m),” said the ratings agency in a statement.
“The rating on the senior secured bond also recognises the fact that it benefits from an indirect guarantee from the guarantor group. The instrument rating takes into account the existence of legacy amortising unsecured notes at HOT [which amount to around] NIS1.4bn (US$362m) at closing.”
