Luxembourg-based telco Altice has raised US$1.7bn to fund the acquisitions of Orange Dominicana and Tricom in the Dominican Republic by selling two tranches of high-yield notes priced at par.
It sold US$1.3bn in 6.5% senior secured notes due 2022…
Luxembourg-based telco Altice has raised US$1.7bn to fund the acquisitions of Orange Dominicana and Tricom in the Dominican Republic by selling two tranches of high-yield notes priced at par.
It sold US$1.3bn in 6.5% senior secured notes due 2022 through subsidiary Altice Financing. That tranche was predominantly in dollars, but also included US$413m in euro-denominated notes.
Altice also sold US$400m of 8.125% senior notes due 2024 through its Altice Finco vehicle. Altice’s covenants allow senior secured leverage up to 3x EBITDA and senior leverage up to 4x.
Goldman Sachs led the offering while Barclays, Credit Agricole, Deutsche Bank and Morgan Stanley were bookrunners on the transaction. Ropes & Gray provided legal advice on the financing.
It is Altice’s third bond offering over the last twelve months. It closed a US$1.1bn issuance of notes last December – for the buyout and refinancing of Israel’s Hot Telecommunications – and a €1bn-plus financing package in June, which in part funded the Outremer Telecom buy.
Over this period, demand from investors has risen as Altice’s portfolio of assets has become more geographically diversified, a source with direct knowledge of the situation said, adding that the company has become an easier sell.
Altice’s latest acquisition was Orange Dominicana at the end of November, bought from French incumbent Orange for US$1.4bn.
Prior to this deal, Altice had acquired Tricom on 31 October, also in the Dominican Republic, for an undisclosed price. Tricom’s focus is on cable television, fixed-line telephony and broadband, but it also has a fledgling mobile business.
Altice’s plan is to create a strong quad-play operator in the Dominican Republic by consolidating the two businesses.
The telco is also said to be close to taking on local conglomerate Grupo Leon Jimenes as a partner in the country. The group will likely take a stake of between 10% and 20% in Altice’s two Dominican telecom investments, a person with direct knowledge of the situation told TelecomFinance.
Altice, founded by French investor Patrick Drahi, has become a specialist in entering markets and executing consolidation deals. Earlier this year it acquired enterprise-focused Oni in Portugal to add to its consumer facing cableco Cabovisao.
In June it bought Outremer Telecom, which operates across French territories in the Caribbean and Indian Ocean. It already has operations in Guadeloupe and Martinique. In October, it snapped up wireless operator Mobius to add to the Reunion operations acquired as part of the Outremer deal.
Altice also has operations in France, Israel, Belgium, Luxembourg and Switzerland.
The company is said to be “seriously looking” at an initial public offering in 2014 according to a report last week.
Altice has been adjusting its corporate structure in preparation for a listing, with the creation of an entity to hold Altice and its 40% Numericable stake, the report said. Shares in that entity would be offered to the public.
The Numericable stake is worth around €1.5bn based on the French cableco’s share price. In its Q3 results, Altice reported €1.47bn in pro forma consolidated revenues and €573m pro forma consolidated EBITDA.
