PE-backed cable group Ono has approached lenders with a set of proposals to refinance part of its E3.6bn senior debt expiring 2013.
All of the company’s 79 lenders met on January 19 to hear details of the plan, Ono – formally known as Cableuropa -…
PE-backed cable group Ono has approached lenders with a set of proposals to refinance part of its E3.6bn senior debt expiring 2013.
All of the company’s 79 lenders met on January 19 to hear details of the plan, Ono – formally known as Cableuropa – said.
The proposal’s main tenets include E200m in new pay-in-kind shareholder notes; a reset of financial covenants and the issuance of a new loan or bond, either directly Ono or through a special purpose vehicle.
Goldman Sachs is advising Ono’s board on its options.
To go ahead, the plan needs the backing of lenders holding at least 80% of its existing senior debt. Lenders holding some 44% of the debt have already committed to the plan.
Ono has set no deadline for the proposal to be approved, but hopes to give an update on the negotiations by mid-February.
If it fails, key concerns would be Ono’s covenant headroom and amortisation schedules in 2010, Standard & Poor’s warns in a report.
Ono has some E4.15bn in total debt, representing nearly 6x its EBITDA. Much of this stems from the E3.6bn senior facility it arranged in 2007 with a club of banks including Calyon, Fortis, RBS, BSCH and SG. Of this, two term loans A and B totalling E1.8bn expire by 2012, while the rest expires in 2013.
The debt refi would take the shape of a forward-start facility, maturing in 2013 and composed of tranches that could be drawn upon to cover the debt that expires before then.
“As tranches A & B amortise steeply between 2010 and 2012, we believe that the FSF could meaningfully benefit Cableuropa’s near-term liquidity,” S&P says.
Lenders who agree to the deal will receive a fee of 100bps and a margin boost of 125bps on their forward-start commitments.
Meanwhile, the E200m PIK capital injection would consist of E125m in deeply subordinated debt, while the remaining E75m will be subject to liquidity tests.
“This is the first in a series of transactions which we intend to undertake to diversify our sources of financing and term out our debt maturities,” Ono CFO Jonathan Cumming said in a statement.
S&P upgraded Ono’s long-term rating to CCC+ following the news, and said it could potentially upgrade it to B if the refinancing is successful.
