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LPC-Altice loans drop further as concerns grow
December 4, 2017 / 5:48 PM / 8 days ago

LPC-Altice loans drop further as concerns grow

LONDON, Dec 4 (Reuters) - French telecom group Altice’s recently refinanced leveraged loans dropped further in the secondary loan market on Monday, as shares in the group fell below €6.50, before rebounding slightly.

The Patrick Drahi-controlled business’s €300m term loan was quoted at 98.25% of face value on Monday, a 62.5bp drop on last Monday’s price and a drop of more than 200bp in the last month, according to Thomson Reuters LPC data.

Shares in the group fell to €6.87 on Monday afternoon, from €17.40 in mid-October, following a profit warning issued in early November and mounting concerns about the group’s €51bn debt pile.

The group announced a deal to sell Swiss businesses green.ch and Green Datacenter for €183.5m on Monday, having previously said it plans to divest certain non-core businesses.

“It’s a massive structure and I think it makes sense to divest some assets,” a senior investor said.

Pricing on Altice’s majority owned telecoms company SFR Group’s term loan B11 and B12 term loans also fell notably on Monday to 98% of face value each, losing around 75bp since the end of last week, Thomson Reuters LPC data shows.

The senior investor said it was to be expected the loans would fall in secondary, given the pressure on Altice’s share price.

While debt investors hold some concerns as most of Altice’s senior debt is held in its two operating companies, leverage feels manageable at around 4.0x Ebitda and they are unlikely to experience big losses, the investor said.

“There’s unlikely to be any material value loss to debt investors. It’s mainly an equity issue from our point of view.”

Altice said on November 2 that it lost about 75,000 broadband customers in France, its biggest market, in the third quarter, with some lured by heavy promotions on offer at rivals.

CEO Michel Combes resigned from the firm shortly after, prompting Drahi to re-instate himself to everyday handling of the business as president.

Altice finalised its cross-border loan refinancing in October to lower the cost of its borrowings and extend maturities. The €300m tranche and US$900m, 8.25-year tranches closed to pay 275bp over Euribor/Libor, with a 0% floor, 25bp tighter than initial guidance of 300bp over Euribor/Libor.

Editing by Claire Ruckin

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