VimpelCom plans to issue US dollar and Russian rouble notes in the international bond markets to refinance existing debt and for other general corporate purposes.
The Amsterdam-based telco announced today that Barclays, Citgroup, ING and the Royal Bank…
VimpelCom plans to issue US dollar and Russian rouble notes in the international bond markets to refinance existing debt and for other general corporate purposes.
The Amsterdam-based telco announced today that Barclays, Citgroup, ING and the Royal Bank of Scotland will act as lead managers for the financing, which is subject to market and other conditions. The principle amount, maturity date and interest rate of which are yet to be determined.
The notes are to be issued by Dutch subsidiary VimpelCom Holdings and guaranteed by Russia-based OJSC Vimpel-Communications. Specifically, the proceeds will be used to refinance debt held by the latter set to mature in 2013.
Moody’s has assigned a provisional rating of (P)Ba3 with a stable outlook to the issue, which it says could total US$2bn.
The agency expects the notes to rank pari passu with other unsecured and unsubordinated debt guaranteed by the Russian subsidiary.
“The Ba3 CFR [Corporate Family Rating] continues to reflect Moody’s view that, notwithstanding geographic diversification and its significantly larger scale following the acquisition of Wind Telecom in April 2011, VimpelCom remains reliant upon its Russian and Ukrainian subsidiaries consolidated under VimpelCom Holdings (VimpelCom OJSC and Kyivstar, respectively), which continue to determine its financial flexibility.
“Therefore, Moody’s primarily bases its assessment of VimpelCom’s business and financial profile on its Russian and Ukrainian operations.”
According to an IFR report, pricing guidance for six and ten-year dollar eurobonds is at mid-swaps plus 425 basis points. The company is also considering five-year rouble notes, the report stated.
VimpelCom – which operates in Russia, Ukraine, other eastern European markets, Italy, Canada and parts of Asia and Africa – reported gross debt of US$26.6bn at the end of Q3 2012.
Listed on the New York Stock Exchange, the company is co-owned by Russian businessman Mikhail Fridman’s Alfa Group and Norwegian telco Telenor.
