UK-based communications infrastructure firm Arqiva has issued £164m (US$270m) of new 16.4-year senior secured notes.
The notes carry a coupon of 5.34% and priced at par. The final price was 203 basis points over Gilts, at the tight end of the revised…
UK-based communications infrastructure firm Arqiva has issued £164m (US$270m) of new 16.4-year senior secured notes.
The notes carry a coupon of 5.34% and priced at par. The final price was 203 basis points over Gilts, at the tight end of the revised guidance and below the initial pricing thoughts of 210bps over Gilts.
This final pricing reflected the strong investor demand for the debt with the order book over £450m. The vast majority of purchasers came from the UK (95%) and predominantly comprised investment managers (88%).
HSBC, Mitsubishi UFJ Securities, Societe Generale CIB and Santander were joint bookrunners for the transaction.
Arqiva plans to use proceeds from the offering to refinance existing debt and push out its maturities. As of mid-2013, Arqiva’s net debt to EBITDA ratio was 5.37 times.
According to one banker, despite the relatively volatile state of the bond market at present, investors are still keen to participate on deals where there are decent returns.
The source added that the new notes benefited from the strong secondary performance of Arqiva’s inaugural sterling issuance in February 2013.
That financing saw the UK tower company raise £3.7bn in bonds and loans in order to refinance the complex debt structure it originally secured back in 2007. The February deal left Arqiva with £1.6bn of bank debt – split roughly 50/50 between three year and five year terms – which it has said it plans to replace with investment grade bonds.
Arqiva provides television, radio, satellite and wireless communications infrastructure in the UK. It also has operations in Ireland, mainland Europe and the US.
Canadian pension fund Canada Pension Plan Investment Board (CPPIB) is Arqiva’s largest shareholder with a 48% stake. Australian fund manager Macquarie, through its Macquarie European Infrastructure Fund 2, holds a 25% stake and late last year was rumoured to be mulling a sale of this.
