Poland’s fourth-largest mobile operator P4 (Play) has priced a €415m (US$557.4m) offering of euro-denominated senior PIK toggle notes due February 2020.
The notes were issued at 99% with a 7.75% interest rate for payment in cash and 8.5% for payment…
Poland’s fourth-largest mobile operator P4 (Play) has priced a €415m (US$557.4m) offering of euro-denominated senior PIK toggle notes due February 2020.
The notes were issued at 99% with a 7.75% interest rate for payment in cash and 8.5% for payment in kind, a company spokesperson said. Before 28 February 2016, up to 40% of the notes may be redeemed at 107.75%.
Bank of America Merrill Lynch and JP Morgan were global coordinators and joint physical bookrunners for the issue, the spokesperson said. Citi and Credit Suisse were joint bookrunners.
P4 announced on Tuesday that its ultimate parent Play Topco would issue the PIK notes, which Moody’s subsequently assigned a provisional Caa1 rating.
The operator said the proceeds would be distributed to Play Topco shareholders, Icelandic businessman Bjorgolfur Thor Bjorgolfsson’s NTP and Greek investment fund Tollerton.
Following a later, unspecified use of part of the proceeds by NTP, Play Topco will become the indirect holding company for P4, the company said. The rest of the proceeds will be used to pay fees and other expenses related to the offering.
Moody’s said it rated the PIK notes two notches below P4’s B2 rating to reflect their subordinated position relative to the other instruments in the group’s capital structure.
“Due to the high initial leverage and the substantial amount of secured notes and senior unsecured notes that effectively rank ahead of the new PIK notes in case of enforcement, Moody’s expects that the recoveries for the PIK noteholders in a default scenario would be very limited.”
The PIK note offering comes six months after P4’s debut €900m (US$1.23bn) bond issue. Part of the proceeds of this issue was also used to pay a dividend, while the rest was used to refinance existing debt.
Tollerton has a 50.3% stake in P4, while Bjorgolfsson’s fund Novator has the remaining 49.7%.