Russian operator Megafon is looking to place up to Rbs15bn (US$242m) high-yield notes on the Moscow Stock Exchange, to refinance existing debt.
Russian operator Megafon (MCX:MFON) is looking to place up to Rbs15bn (US$242m) high-yield notes on the Moscow Stock Exchange, to refinance existing debt.
Sberbank, VTB Capital and Raiffeisenbank are acting as lead arrangers on the 10-year offering.
Megafon said the marketing coupon range had been set between 11.65% and 11.85%, to be determined in the book building exercise. It did not specify what debt it would use the proceeds to refinance.
The transaction is set to complete on 23 October. Raiffeisenbank is also serving as placement agent.
Megafon has been assigned a Ba1 long-term rating by Moody’s with a negative outlook. In a recent report, the ratings agency said it expected revenues for European operators to rise, but that was unlikely to be the case in Russia.
“Outlook for Russian telcos is moderately negative as profitability will be under pressure due to their high focus on domestic markets,” Moody’s said in the report, published mid-October.
“Margins will be pressured because operators will only be able to partially pass rising costs on to subscribers in what is a highly competitive and saturated market.”
Moody’s added that it expected competition to rise in the Russian market during this quarter as Т2 RTK Holding – a joint venture between Tele2 and Rostelecom operating under the Tele2 brand – will launch in the Moscow mobile market on 22 October.