LONDON, Jan 29 (IFR) - Ziggo's exchange of its 2018 senior
notes for new paper also offers bondholders the potential to
receive new 10-year bonds later this year.
As part of Liberty Global's acquisition debt package, Ziggo
has offered holders of its EUR1.2bn 8% 2018 senior notes the
ability to exchange into EUR934m of new 8% senior notes also due
Agreeing to exchange, however, means that bondholders will
receive a guaranteed allocation on a new 10-year non-call five
(10NC5) high-yield bond, according to sources.
This 10NC5 bond will only come into existence if and when
Liberty's acquisition of Ziggo is closed, which is expected to
take six to nine months.
The new 2018 notes should act as placeholders for the 10NC5
bonds, but if the acquisition is not approved, then bondholders
would keep the 2018 notes.
The coupon on the 10NC5 paper is scheduled to be set next
week, the sources added, meaning that the price will be
determined by a similar process to a new bond issue.
"I believe this is the first time this structure has been
used," said one of the sources.
The source added that the deal will leave Ziggo with 5x
total leverage, while the EUR3.735bn term loan B being raised
with put it 4x levered at the senior secured level.
Credit Suisse is the dealer manager and structuring adviser
on the exchange.
Global coordinators on the loan package are Credit Suisse
and Bank of America Merrill Lynch. Joint bookrunners and
mandated lead arrangers are Credit Suisse, Bank of America
Merrill Lynch, ABN Amro, Credit Agricole, Deutsche Bank, HSBC,
ING, JP Morgan, Morgan Stanley Nomura, Rabobank, Scotiabank and