Poland’s fourth-largest mobile operator P4 (Play) has raised about €900m (US$1.23bn) from its high-yield bond issue due 2019, €30m (US$41m) more than anticipated.
The issue has three tranches: €600m (US$819.34m) of euro-denominated senior…
Poland’s fourth-largest mobile operator P4 (Play) has raised about €900m (US$1.23bn) from its high-yield bond issue due 2019, €30m (US$41m) more than anticipated.
The issue has three tranches: €600m (US$819.34m) of euro-denominated senior secured notes, PLN130m (US$42.12m) in Polish zloty-denominated senior secured notes, and €270m (US$368.73m) in senior unsecured euro-denominated notes, according to ratings agencies. The latter tranche was originally expected to raise €240m (US$327.76m).
Subsidiary Play Finance 2 is the issuer of the senior secured notes and Play 1 the issuer of the senior unsecured notes.
Proceeds are to be used to refinance existing debt and pay a shareholder dividend. Fitch expects the dividend to amount to PLN1.43bn (US$463.2m).
Fitch assigned Play Finance 2’s senior secured notes final ratings of BB-/RR3/BBB (pol) and Play 1’s senior unsecured notes a final rating of B-/RR6.
The agency has assigned P4 a long-term issuer default rating of B+ and a national long-term rating of BBB-(pol) with a positive outlook.
“P4 has proven a nimble and fast-growing challenger in the Polish mobile market, establishing itself as a strong brand with an easily understood service message and competitive distribution network,” Fitch said. “Revenues and cash flows demonstrate strong growth, with the company exhibiting improving margins, albeit below market and positive (pre-distribution) free cash flow.”
However, the agency said the rating is affected by uncertainty surrounding P4’s future financial policy as well as the company’s pace of growth, market position and the currency mismatch of its proposed debt structure.
A P4 spokesperson declined to comment on the issue, suggesting rating agencies be consulted for details.
P4 reported revenues of PLN3.7bn (US$1.2bn) and EBITDA of PLN689m (US$222.3m) for the 12 months ended 30 September 2013, Moody’s noted. The agency said the operator’s leverage at closing will be high given its debt/EBITDA as adjusted by Moody’s will be about 4.8x. However, Moody’s expects P4 to delever to about 4.0x by the end of the year.
