European telecoms group Altice (AMS:ATC) has reportedly launched a US$6.3bn bond offering to help finance its acquisition of Cablevision (NYSE:CVC) in the US.
European telecoms group Altice (AMS:ATC) has reportedly launched a US$6.3bn bond offering to help finance its acquisition of Cablevision (NYSE:CVC) in the US.
The two-part offering is being made via an entity called Neptune Finco Corp, which will merge with Cablevision’s CSC Holdings operating unit, reported Bloomberg citing a person with knowledge of the transaction. This would reportedly add US$5.6bn to the New York-based cableco’s debt load.
Cablevision bonds have been falling since Altice announced the acquisition last week and have slid further since Cablevision began to market a US$2.3bn acquisition loan, the report said.
Both Moody’s and Standard & Poor’s have placed Cablevision on review for downgrade because of concerns about the amount of debt required to fund the deal.
Patrick Drahi’s Altice has said the planned cash-and-stock deal values Cablevision at US$17.7bn, including debt, and will create the fourth-largest cableco in the US. According to data from S&P Capital IQ, the cash consideration to shareholders totals US$9.7bn.
Altice said it will fund the deal with US$14.5bn of new and existing debt at Cablevision, cash on hand at Cablevision and US$3.3n of its own cash. BC Partners and CPP Investment Board, which own the remaining 30% of Suddenlink, have an option to participate for up to 30% of the target’s equity.
Altice plans to raise equity by issuing Class A shares to help fund its portion of the deal. It says it has received full financing commitments from JP Morgan, BNP Paribas and Barclays.
The parties expect the deal to close in the first half of 2016 subject to regulatory approvals.