TRLPC-Altice lowers pricing on acquisition financing-bankers

jueves 29 de enero de 2015 08:30 GYT

By Claire Ruckin

LONDON Jan 29 (Reuters) - Pricing has tightened on an 825 million euro-equivalent ($932.83 million) loan backing telecoms group Altice's acquisition of Grupo Oi's Portuguese operations after strong demand for the paper, banking sources said on Thursday.

The loan, which forms part of a wider financing including 4.6 billion euros-equivalent of bonds, is the first cross-border deal to price lower on the euro-denominated tranche than the dollar-denominated tranche.

The US loan market has weakened as a result of retail outflows and a slowdown in CLO issuance causing pricing to widen in comparison to Europe.

"Borrowers can get a better deal in Europe than in the US and that was not the case last year. The downside for investors is that Europe is cheaper and you get paid less but the upside is that there should be more cross border deals," a loan investor said.

A 400 million euro tranche has been reverse flexed to pay 425 basis points (bp) over Euribor from 475bp-500bp guidance. An Original Issue Discount (OID) has also tightened to 99.5 from 99. A $500 million tranche will pay 450bp over Libor at 99 OID from initial guidance of 500bp-525bp at 99 OID, the banking sources said.

A 1 percent Euribor/Libor floor, which guarantees a minimum return for investors, remains unchanged.

"Demand for the financing is phenomenal," a banker close to the deal said.

Lenders have been asked to recommit to the loan by the end of the day on Jan. 29.

The bonds are also due to price tighter after being multiple-times oversubscribed. Pricing on a 500 million euro senior secured bond is expected to come in around 5.375-5.5 percent, tighter than the low 6 percent range whispered, the banking sources said.

Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley underwrote the debt financing. ($1 = 0.8844 euros) (Editing by Christopher Mangham)