B Communications (B Com), the holding company that controls Israeli incumbent Bezeq, is looking to raise up to US$775m by offering senior secured notes split into US dollar and euro tranches.
The company plans to use the proceeds from the issuance to…
B Communications (B Com), the holding company that controls Israeli incumbent Bezeq, is looking to raise up to US$775m by offering senior secured notes split into US dollar and euro tranches.
The company plans to use the proceeds from the issuance to repay outstanding loans used to buy its controlling interest in Bezeq in 2010.
It will also “deposit funds into a debt service account”, it said in a statement.
Fitch is expecting to assign a BB- rating to the offering, citing B Com’s strong credit profile but also its limited flexibility to sell assets because of legal requirements over controlling stakes in Israel.
In November last year, B Com signed a new financing agreement with a consortium of local banks, modifying certain terms of a previous facility.
The original NIS3.9bn (US$1.1bn) financing was secured more than three years ago to allow B Com to acquire a 30.44% controlling interest in Bezeq.
The new agreement signed with lenders led by Bank Hapoalim has enabled B Com to make an early repayment of NIS400m (US$113.1m) of debt. It also decreased the company’s mandatory debt repayments by about NIS150m to NIS330m (US$93.3m) per year.
Bezeq is Israel’s largest telco, providing fixed-line, mobile, internet and pay-TV services. The state has regularly reduced its stake in the company from 100% in 1990 to about 6% nowadays.
