C&W launches consent on Liberty purchase agreement
By Paul Kilby
NEW YORK, Nov 17 (IFR) - Caribbean telecom operator Cable & Wireless Communications launched a consent solicitation for US$750m of its 2022s after Liberty Global agreed to buy the company in a deal valued at US$8.2bn including debt.
The company is asking holders to waive any obligation by the issuer, Sable Finance - a C&W subsidiary - to offer a 101 change of control option within 30 days of the proposed acquisition.
If holders of 100% of the notes agree to consent before the expiration date of November 24, they will receive US$30 per US$1,000 principal amount.
The fewer bonds offered in the consent, the higher the payment. Creditors will receive US$40 if 75% of the bonds are tendered, and US$59.88 if just 50.1% are tendered.
The bonds have rallied about 1/8 of a point to trade on Tuesday at a mid-market price of 101.50.
Liberty has a US$790m senior unsecured bridge facility in place to exercise the change of control option at 101.00 in the event that the solicitation fails, according to CreditSights.
CreditSights analysts like the consent premium but recommend lightening exposure to the unsecured 2022s amid expectations that a more leveraged company will emerge from the acquisition, possibly subordinating the notes.
Liberty is likely to embark on more M&A after creating a regional platform in Latin America and the Caribbean, changing the risk profile for creditors who had held C&W debt, the research shop said. Continuación...