RLPC-Arqiva in $5.8 billion loan and bond refinancing

LONDON Wed Feb 13, 2013 8:22am EST

LONDON Feb 13 (Reuters) - British broadcast transmission provider Arqiva's owners have injected 867 million pounds ($1.4 billion) fresh equity to allow a 3.7 billion pound loan and bond refinancing to go ahead.

The seven shareholders injected the new equity to pay down debt, allowing Arqiva to get a BBB investment grade credit rating and issue bonds to refinance loans taken out in 2007 and which mature in 2014.

Shareholders, including Canada Pension Plan Investment Board with a 48 percent holding and Macquarie European Infrastructure Fund 2 with 25 percent, put in 400 million pounds of the equity injection in cash. The remainder was paid out of cash Arqiva has accumulated by not paying a dividend since 2009.

HSBC and Rothschild advised on the refinancing.

Arqiva, which provides most of the infrastructure behind radio, satellite, television and wireless communication in Britain, was saddled with billions of pounds debt at the height of the buyout boom - it was created in 2007 when a group of investors led by Macquarie merged National Grid Wireless with NTL Broadcast.

Some of the new equity will repay long-dated interest rate swaps put in place in 2007 and now "out of the money", bankers said. While the swaps were designed to hedge against the risk of rising interest rates, rates fell to historic lows.

Along with the loan and bond refinancing, Arqiva has put new interest rate swaps and inflation swaps in place that should be better value, it said.

NEW DEBT

Arqiva has put 2.5 billion pounds of fully committed bank facilities in place, including 1.8 billion in three and five-year senior term loans.

The new loans also include a 400 million pound, five-year capital expenditure facility; a 100 million, five-year working capital facility; and a 200 million, 364-day liquidity facility.

The senior loan facilities are being provided by a club of 20 lenders, with 14 banks acting as bookrunners - Bank of America Merrill Lynch, Bank of Tokyo Mitsubishi, Barclays, Commerzbank, Deutsche Bank, HSBC, ING, JP Morgan, Lloyds Bank, National Australia Bank, Royal Bank of Scotland, Santander, Scotia Bank, and Societe General.

The other lenders are Banca IMI, CIBC, Export Development Canada, Nomura, Prudential M&G, and UBS, Lenders on the senior facilities committed 140 million pounds each, sources said.

Arqiva is also raising a 500 million pound dual-tranche investment grade bond rated BBB and a 600 million seven-year sterling and dollar high yield bond rated B-.

Bond roadshows are being held until Feb. 19 across Europe and the United States. Barclays, HSBC, Lloyds, Mitsubishi, and Royal Bank of Scotland are bookrunners on the investment grade bond while Deutsche Bank, JP Morgan and RBS are global co-ordinators on the high yield bond. Bank of America Merrill Lynch, Barclays, HSBC, Lloyds and UBS are acting as joint bookrunners on the high-yield bond.

Leverage on the loan and bond refinancing is 5.5 times Arqiva's earnings and seven times through the junior debt.

Arqiva has annual revenue of more than 800 million pounds and employs more than 2,000 people, according to its website.

Major customers include the BBC, ITV, Channel 4, Five, BSkyB, Discovery, CNN, ESPN, Vodafone, O2, Orange, T-Mobile, mobile provider 3 and the emergency services.

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