LONDON Feb 13 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
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.
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.