French cable operator Numericable Group concluded the largest ever high yield bond offering on Thursday, raising €7.9 billion ($10.9 billion).
The high yield bond's five tranches are split as follows: $2.4 billion at 4.875 percent fixed rate senior notes due 2019; €1.0 billion at 5.375 percent fixed rate senior notes due 2022; $4.0 billion 6.00 percent senior notes due 2022; €1.25 billion 5.625 percent senior notes due 2024; $1.375 billion 6.25 percent fixed rate senior notes due 2024.
Joint global coordinators on the cross-border offering were Deutsche Bank, JP Morgan and Goldman Sachs. It came ahead of Numericable's proposed acquisition of French telephone company SFR.
All five tranches priced at the tight end or tighter than guidance, according to press reports which indicated the offering was 10-times subscribed. A further bond issuance by Numericable parent Altice, which raised €4.15 billion, was more than seven-times covered, indicating that appetite for jumbo leveraged deals in Europe is back. The transaction was also the second-largest US offering and includes the third-largest single tranche ever sold at $4 billion, according to Forbes.
Rated B+ and Ba3 by S&P and Moody's respectively, the bond will be used along with proceeds from €3.78 billion of loans, and a €4.7 billion rights issue, to finance the group’s proposed purchase of France’s second-largest phone company SFR from French media conglomerate Vivendi, a statement from Numericable said.
The loans were covenant-lite six-year cross-border term loans. Overall, Altice is though to have raised more than €17 billion ($23 billion).
The €4.7 billion rights issue will be financed via the €4.15 billion cross-border bond by Numericable’s parent group Altice. They priced yesterday an offering of €2.075 billion 7.25 percent senior notes due 2022 and $2.9 billion 7.75 percent senior notes due 2022. These funds will also be used to purchase certain shares from funds affiliated with private equity firms Carlyle Group and Cinven and repay existing Altice debt.