VimpelCom’s Italian unit Wind Telecomunicazioni has priced a dual-tranche €3.78bn (US$5.22bn) bond due 2021 to refinance €4bn (US$5.52bn) in debt.
The new issue forms part of a multi-step refinancing plan for Wind first announced in March.
The…
VimpelCom’s Italian unit Wind Telecomunicazioni has priced a dual-tranche €3.78bn (US$5.22bn) bond due 2021 to refinance €4bn (US$5.52bn) in debt.
The new issue forms part of a multi-step refinancing plan for Wind first announced in March.
The offering, carried out by Wind Acquisition Finance (WAF), consists of €1.75bn (US$2.42bn) of 7% euro-denominated senior unsecured notes and €2.03bn (US$2.8bn) of 7.38% US dollar-denominated senior unsecured notes. The euro notes priced at par to yield 7.375%, while the dollar notes priced at par to yield 7%.
Global coordinators and joint physical bookrunners are Deutsche Bank and Credit Suisse. Global coordinators are BNP Paribas, Credit Agricole and Banca IMI, joint lead bookrunners are Barclays, ING, Societe Generale and UniCredit and joint bookrunners are Morgan Stanley and Natixis.
Part of the proceeds will be used to refinance WAF’s €2.7bn (US$3.73bn) of junior secured 11.75% notes due 2017.
The rest, alongside a €500m (US$690.27m) indirect cash injection from VimpelCom, will enable the Italian telco’s immediate parent Wind Acquisition Holdings Finance to redeem €1.3bn (US$1.19bn) of 12.25% PIK-toggle notes also due 2017. The cash injection remains subject to the completion of the new offering.
“The aim of the refinancing plan is to provide WAF and Wind with a sustainable, manageable capital structure with an extended maturity profile and significant interest cost savings resulting in stronger cash flows, which will facilitate a deleveraging trajectory of WAF and Wind,” VimpelCom said.
Moody’s has since downgraded Wind’s corporate family and probability of default ratings a notch to B2 and B2D respectively. The agency has rated the new notes (P)Caa1 but kept the ratings on existing senior secured notes at Ba3.
Moody’s said the B2 corporate family rating reflects Wind’s high leverage, which it expects to equal 5.6x adjusted debt/EBITDA upon completion of the refinancing. Low growth expectations for the Italian telecoms sector in 2014 and Wind’s relatively weak cash flow were also factors. However, the agency said Wind’s positive attributes include its growing share of the local market and diversified business model encompassing fixed-line, mobile and broadband services. In addition, the refinancing is expected to result in lower interest costs.
Wind’s debt pile totals about US$14.6bn according to VimpelCom’s latest earnings report.
Yesterday, NASDAQ-listed VimpelCom completed an up to US$1.8bn revolving credit facility to replace an existing US$500m RCF signed in 2011.
