Danish incumbent telco TDC aims to issue new bonds, partly to refinance existing debt, as early as this year with considerably lower interest rates than those paid five years ago when it was under private equity ownership.
The Copenhagen-based telco…
Danish incumbent telco TDC aims to issue new bonds, partly to refinance existing debt, as early as this year with considerably lower interest rates than those paid five years ago when it was under private equity ownership.
The Copenhagen-based telco could refinance two euro-denominated bonds maturing in 2014, CFO Pernille Erenbjerg told Bloomberg. It intends to replace them with euro notes and, based on market “feedback”, she said it expects coupons of about 2.5%. The current coupons are set at 3.5% and 5.875%. The bonds are likely to have maturities of seven to 10 years, she added.
Market turmoil resulting from the conflict in Russia and Ukraine could affect the timing of the new offerings, Erenbjerg said, but noted that its impact on the corporate bond market so far seems limited.
TDC has more than €1bn (US$1.3bn) in bonds set to mature over the next 16 months.
The company intends to keep bonds as its main funding source, and Erenbjerg said its good credit rating and size make it sensible to go to the euro bond market.
She noted that much has changed for TDC and the bond market since 2009, when the company, then controlled by PE firms including KKR, issued a €274m eurobond due December 2015 with a 5.875% coupon.
Last September, KKR sold its remaining 11% stake in TDC for DKr4.17bn (US$744m) through an accelerated bookbuild.
The group was the last member of the NTC consortium of PE firms which once owned a majority stake in the telco, after buying an 87.9% holding in 2005 for US$15.3bn.
Company open to offers – CFO
Meanwhile, Bloomberg cited Erenbjerg in a separate report as saying TDC is ready to consider an offer for the company. She expects consolidation will leave “fewer” players in the Nordic telecoms sector over the next five years. While she predicts larger operators such as Sweden’s TeliaSonera and Norway’s Telenor will not become takeover targets, she said TDC’s size means it might.
TDC CEO Carsten Dilling told TelecomFinance in April that there was probably one too many mobile operator in Denmark, but dismissed suggestions his company would play an active role, given its already-large size.
On 4 June, TDC announced that it had completed the US$214m sale of its Finnish subsidiaries to local telco DNA.
The Danish telco provides a full suite of telecoms services in Denmark, and continues to offer B2B services in Sweden and Norway.
