May 8, 2014 / 3:00 PM / in 4 years

Abu Dhabi telco Etisalat seeks banks to arrange debut bond deal - IFR

DUBAI, May 8 (IFR) - Abu Dhabi-based telecoms firm Etisalat has sent out an invitation to banks to pitch for arranger roles on a potential bond issuance, sources said.

The company is planning to access the bond market to fund part of its 4.2 billion euro ($5.85 billion) acquisition of a 53 percent stake in Morocco’s Maroc Telecom from Vivendi .

Etisalat said earlier on Thursday that it expects to close the acquisition on May 14.

The plan is to use bond market financing to take out a bridge loan signed in connection with the acquisition. Should it issue, it will be the operator’s maiden public debt offering.

Late last month, the company agreed a dual-tranche 3.15 billion euro facility to fund a large part of its acquisition.

The financing consists of two facilities, which can be used in euros and/or in U.S. dollars, and has been borrowed from a group of 17 international, regional and local banks.

The first tranche is a 12-month bridge loan amounting to 2.1 billion euros at a price of 45 basis points over Euribor for the first six months, and then increasing by 15 bps in each of the following three months.

The second tranche is a 1.05 billion euro three-year loan with a margin of 87 bps over Euribor.

The rest of the purchase price will be funded by an unnamed Abu Dhabi government-owned entity, sources told Reuters last month. {ID:nL6N0NJ0PE] ($1 = 0.7183 Euros) (Reporting by Abhinav Ramnarayan; Editing by David French)

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