Ono ties up debt restructuring

Spanish cable firm Ono has received lender approval for a waiver to go ahead with its E3.6bn debt restructuring.
The company eventually secured the support of over 80% of its lenders to delay certain repayments until 2013 while shareholders including…

Spanish cable firm Ono has received lender approval for a waiver to go ahead with its E3.6bn debt restructuring.

The company eventually secured the support of over 80% of its lenders to delay certain repayments until 2013 while shareholders including Providence and Thomas H. Lee Partners agreed to inject a further E200m of cash into the business.

In a statement Chairman Jose Maria Castellano said: “The success of the refinancing plan proves the support and trust that financial markets have in the business model that we are working on.”

One banker agreed with this sentiment and told TelecomFinance: “This is great news for the company. It is an important step into reorganising the capital structure of the company. Most of the amortising term loans have been converted into a bullet tranche of around E2bn which gives the company much more space.”

Goldman Sachs advised Ono on the process. BNP Paribas, Calyon, SG and Banco Santander helped to co-ordinate lenders to approve the waiver.

The refinancing includes a 125bp increase over the margin of committed payments.

Ono had earlier missed the February 12 deadline to gain approval from lenders to refinance a E1.8bn piece of debt. It needed to persuade 80% of the lenders to agree to the change in terms.

All of the company’s 79 lenders met on January 19 to hear details of the plan, Ono said.

The proposal’s main features included the E200m in new pay-in-kind shareholder notes; a reset of financial covenants and the issuance of a new loan or bond, either directly from Ono or through a special purpose vehicle.

Bankers believe that Ono is likely to issue a high yield bond soon. One said: “Ono is a likely candidate for a high yield issue and this will be done on an opportunistic basis. There may be a window for them in May or June. They are not forced to do it but the market is looking quite good.”

Were the plan to have failed, key concerns would have been Ono’s covenant headroom and amortisation schedules in 2010.

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 will 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.