UK communications infrastructure firm Arqiva is already considering its next senior bond after pricing £1.35bn of notes last Friday, according to CFO Phil Moses.
In an interview with SatelliteFinance, Moses said the company plans to issue a senior US$…
UK communications infrastructure firm Arqiva is already considering its next senior bond after pricing £1.35bn of notes last Friday, according to CFO Phil Moses.
In an interview with SatelliteFinance, Moses said the company plans to issue a senior US$ bond “pretty quickly”, after dropping a planned dollar-denominated tranche of its high yield issue last week following “unprecedented” demand for its sterling issue.
After being more than twice oversubscribed, the company upped the size of its investment grade bond by £250m to £750m. The strong demand also saw its £600m high yield junior bond being taken out entirely in sterling – despite the company marketing the issue during US-based roadshows.
“On the day before we were going live we pulled the dollar bond because we had so much sterling demand that we didn’t need to take the currency exchange risk,” explained Moses.
The junior issue, which carries a 9.5% coupon, is thought to be the first £600m high yield bond at B-/B3 in sterling.
The investment grade bond has a £350m seven-year tranche with a coupon of just over 4%, and a £400m 20-year tranche at just below 4.1%.
Last week’s bond issue was part of a wider £3.7bn bank and loan transaction that saw Arqiva refinance debt originally secured back in 2007.
The refinancing leaves Arqiva with £1.6bn of bank debt – split roughly 50/50 between three year and five year terms – which the company will replace with investment grade bonds.
As well as dollar and further sterling bonds, Moses said the company would also consider investment grade notes in euro and Canadian dollars. The Canada Pension Plan Investment Board owns 48% of Arqiva, and he said this has given the company many useful contacts with banks and pension funds in the country.
Rothschild is the company’s main adviser for the refinancing, and HSBC has been advising the company on its credit rating. A club of 19 banks is supporting the refi, including RBS, Barclays, HSBC, Lloyds, JP Morgan, Deutsche Bank, BofA Merrill Lynch, UBS and Commerzbank Bank.
The full interview will appear in the upcoming March edition of SatelliteFinance’s print magazine.
