Orange Switzerland has priced a SFr2bn (US$2.1bn) four-tranche bond following Xavier Niel’s buyout of the operator, which closed earlier this year.
The offering includes a mixture of Swiss franc and euro notes, some of which have fixed rates and…
Orange Switzerland has priced a SFr2bn (US$2.1bn) four-tranche bond following Xavier Niel’s buyout of the operator, which closed earlier this year.
The offering includes a mixture of Swiss franc and euro notes, some of which have fixed rates and others which are floating.
In January, Orange Switzerland bondholders agreed to waive their change-of-control rights following Niel’s SFr2.8bn (US$2.9bn) acquisition of the company from Apax Partners through his NJJ Capital vehicle.
The covenants of the outstanding SFr1.7bn (US$1.7bn) high-yield notes had given bondholders a put option to sell them back to the issuer if there was a change of control at the company, but NJJ preferred to keep the debt on the operator’s books. Orange Switzerland is now refinancing that same debt.
Credit Suisse is global coordinator on this new bond issue, while BNP Paribas, Goldman Sachs, JP Morgan, Natixis and Societe Generale are joint bookrunners. There were roadshows in London, Paris and Zurich earlier this week to market the offering.
The senior secured SFr450m notes due 2022 priced at par to yield 3.625%, 333 bps above the benchmark 2% Swiss government bond also due 2022.
Orange Switzerland also offered €1bn of senior secured notes due 2022 that priced at par to yield 3.875% at a spread of 380 bps over an equivalent German government bond. In addition it issued €265m of senior secured floating rate notes due 2022 with a coupon of three month weighted euribor plus 375 bps, and €250m senior unsecured notes maturing in 2023 which will yield 4.875%. These tranches also priced at par.
Net proceeds from the offering, along with cash on hand, will be used to redeem in full all the company’s existing notes, terminate or amend its existing hedging obligations, and pay the shareholder a dividend. Orange Switzerland, which competes in mobile against Swisscom and Sunrise, posted FY 2014 revenue of SFr1.32bn and an adjusted EBITDA of SFr433m.
