RLPC-Polkomtel to refi 5 bln zloty of buyout loans

LONDON, March 20 Wed Mar 20, 2013 2:59pm EDT

LONDON, March 20 (Reuters) - Polish mobile phone operator Polkomtel has asked local and foreign banks for proposals to refinance around 5 billion zloty ($1.5 billion) of loans from the company's 14.3 billion zloty buyout financing of July 2011, bankers said on Wednesday.

Polkomtel said on Tuesday that it has about 11 billion zloty of outstanding debt that backed its 2011 buyout by Polish billionaire Zygmunt Solorz-Zak, including 7.6 billion of zloty loans.

Polkomtel is self-arranging the new refinancing as a corporate loan to take advantage of strong loan market conditions and reduce its borrowing cost.

"Polkomtel has got in touch with local commercial banks over refinancing the whole zloty-denominated lot, around 5 bln zlotys-worth. The market is really favorable right now with interest rates down so it's no wonder they made a move," a market source with knowledge of the matter said.

Polkomtel declined to comment.

The refinancing is expected to cut pricing by around 150 basis points (bps) from 375-450bps on the original deal, bankers said.

Polkomtel is also seeking to cut the size of its lending group. Poland's liquid domestic banks are eager to lend to Polkomtel, but that pricing may be challenging for international banks, bankers said.

Polkomtel is currently unrated, but was rated B+ by Standard & Poor's before the buyout.

BUYOUT LOAN

Polkomtel's 2011 buyout loan was underwritten by Credit Agricole and Deutsche Bank, which were joined by Royal bank of Scotland and Societe Generale as bookrunners and Poland's PKO Bank as mandated lead arranger.

The loan was not structured as a traditional leveraged buyout (LBO) loan and relied on raising as much zloty liquidity as possible from Polish banks which were keen to lend to a household name.

The loan was nearly two times oversubscribed despite deteriorating sovereign debt markets but the arranging banks were left with 1.7 billion euros of bridge loan exposure in September and October 2011 after the bond markets closed.

The bridge loans were refinanced by adding a new 1.75 billon zloty loan to the loan and issuing bonds including Polkomtel's 930 million euro high-yield bond in mid January.

Polkomtel is aiming to boost coverage of its 3G network to 95 percent of the population in two years from 80 percent currently. ($1 = 3.2234 Polish zlotys) (Reporting by Tessa Walsh and Michelle Meineke, additional reporting by Adrian Krajewski and Marcin Goclowski in Warsaw; editing by Ron Askew)

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