(Recasts story, adds further financing details)
By Robert Smith and Claire Ruckin
LONDON, April 9 (IFR/RLPC) - Numericable has
launched 6.55 billion euros ($9.04 billion) of loans which backs
its acquisition of Vivendi's telecom unit SFR and
refinances the French cable company's existing debt.
The jumbo covenant-lite loan is expected to soak up excess
liquidity from European and global investors, which have had few
opportunities to lend due to a lack of new European buyouts in
2014 so far.
"The market wanted a mega-deal and this is definitely that.
Given the asset and credit quality, this deal is expected to
tick all the boxes," a banker said.
Numericable, which beat off a bid from rival Bouygues to buy
SFR, is financing the acquisition with a 16.5 billion euro debt
package which includes loans and bonds denominated in euros and
The debt was underwritten by a group of nine banks. Joint
global co-ordinators Deutsche Bank, Goldman Sachs and JP Morgan
have been joined by Barclays, BNP Paribas, Credit Agricole,
Credit Suisse, ING and Morgan Stanley.
The 16.5 billion debt financing includes 11.64 billion euros
of funded debt at Numericable and SFR's operating company, which
is split between a 5.6 billion euro-equivalent term loan B and
6.04 billion euro-equivalent of bonds.
The package also includes 4.15 billion euros of bonds at
Altice's holding company. Cable group Altice is the holding
company of founder Patrick Drahi, Numericable's largest
The financing also includes a 750 million euro five-year
revolving credit, which pays 325 basis points (bps) over Euribor
at the operating company level and a 200 million euro, five-year
revolving credit which pays 425bps over Euribor at the holding
TERM LOANS LAUNCHED
The six-year term loan B consists of a 2.6 billion euro
tranche and a 3 billion euro-equivalent tranche denominated in
The term loans are expected to pay an interest margin of
350-375bps, which are offered with a 75 percent Libor/Euribor
floor, which guarantees returns to investors and a 99-99.5
Original Issue Discount (OID), banking sources said.
101 soft-call protection is also offered, which means that
the deal cannot be refinanced for six months without paying a
The term loan finances the acquisition and will also
refinance Numericable's existing 2.55 billion euros debt, 2.1
billion euros of which are loans and the remainder is bonds.
The refinanced debt will pay investors interest margins
immediately, while the loans backing the acquisition will be
funded when the M&A deal completes, which is expected in the
third or fourth quarter of 2014.
Investors will be offered a 'ticking fee' as compensation
until the M&A deal closes. Half of the interest margin will be
paid 30 days after the financing is allocated and a full
interest margin is payable after 60 days.
The ticking fee is likely to appease investors which were
worried about making large commitments to the deal, but not
being paid until the deal closes later this year.
"The ticking fee is good and what investors need. The deal
needs to tap so much liquidity that the company has to be
realistic with the terms and pricing on offer," an institutional
Bank meetings will take place in London on Thursday and New
York on Friday for investors and commitments are due April 23
with allocations on April 24. The bonds are expected to launch
on April 14.
Numericable's expected corporate rating and senior secured
rating are both Ba3/B+.
($1 = 0.7249 Euros)
(Editing by Alex Chambers and Tessa Walsh)