The shareholders of UK communications infrastructure firm Arqiva are set to inject £400m of fresh capital to support its planned £3.7bn bond and loan refinancing.
In total, the shareholders, the largest of which is the Canada Pension Plan Investment…
The shareholders of UK communications infrastructure firm Arqiva are set to inject £400m of fresh capital to support its planned £3.7bn bond and loan refinancing.
In total, the shareholders, the largest of which is the Canada Pension Plan Investment Board with a 48% stake, will provide around £780m of capital, with the remainder having been accrued from them not taking dividends since 2009.
It is thought that the equity injection will help the company reduce its leverage ratio and subsequently enable it to issue an investment grade bond in Q1 2013, the proceeds of which will be used to refinance its sizable debt mountain that matures next year.
An Arqiva spokesman said on 7 January that the company was eyeing a £500m senior investment grade bond as part of what he claimed would likely be “the largest financing transaction in 2013”.
There will also be a further holding company bond in the first quarter of this year, with the remaining £2.5bn of debt being refinanced through credit facilities with a club of 20 banks.
It is understood that the top tier banks for this financing include RBS, Barclays, HSBC, Lloyds, JP Morgan, Deutsche Bank, BofA Merrill Lynch, UBS and Commerzbank Bank.
HSBC and Rothschild are advising Arqiva on refinancing the debt.
Arqiva’s existing £3.4bn debt was arranged by Barclays, Dresdner Kleinwort (now part of Commerzbank), HSBC and RBS and was secured by Arqiva’s then majority owner Macquarie to help fund the transformational £2.5bn acquisition of National Grid Wireless in 2007.
It comprises a £2.15bn senior loan, split between a £1.55bn seven-year term loan A1 and a £600m 7.5 year A2 tranche; a £700m seven-year cap-ex line; £475m in junior debt and a £75m revolving credit facility. However, due to expensive long-dated interest swaps the total amount of debt the company needs to refinance has been pushed up to approximately £3.7bn.
Arqiva provides television, radio, satellite and wireless communications infrastructure in the UK. It also has operations in Ireland, mainland Europe and the US.
The consortium of several shareholder investor groups that own the group also includes the Macquarie European Infrastructure Fund 2, which holds a 25% stake.
