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Patrick Drahi Raises $16.6 Billion In London’s Eurobond Markets To Help Pay For Acquisition Of Numericable



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One week ago Patrick Drahi’s Altice and its French cable unit, Numericable, launched a series of major Eurobond issues, with various tranches denominated in both US$ and Euros, to raise money to pay for its pending acquisition of Vivendi’s SFR mobile phone unit.

The acquisition is expected to close later this year subject to a number of customary conditions, including raising the financing it proposed to pay for it including the bond issue.

At the launch of the bond issues the company said it expected Numericable to raise up to just over US$8.3 billion (Euros 6.04 billion) in high yield senior notes – a.k.a. junk bonds.

The terms of the financing have now been settled in London’s capital markets and Patrick Drahi has done very well, raising far more than expected. Numericble alone succeeded in raising a total of US$10.9 billion (Euros 7.9 billion) in new bonds, in tranches of five year, eight year and ten year money, all non-callable.

The Numericable package of senior secured first lien notes included a US$2.4 billion (Euros 1.74 billion), US$ denominated, five year tranche paying 4.875%.

The package then also included a US$1.38 billion (Euros 1 billion), Euro denominated, eight year tranche paying 5.375%. Finally the eight year money included a US$4 billion (Euros 2.9 billion), US$ denominated, eight year tranche paying 6%.

Going out ten years, the Numericable package first included a US$1.73 billion (Euros 1.25 billion), Euro denominated, ten year tranche paying 5.625%. finally it also included a US$1.35 billion (Euros 0.98 billion), US$ denominated, ten year tranche paying 6.25%.

Then Patrick Drahi’s holding company Altice, for its own part, raised at the holding company level a total of US$5.73 billion (Euros 4.15 billion) in eight year money. this included a US$2.9 Billion (Euros 4 billion), US$denominated, tranche paying 7.75%. It also included a US$2.9 billion (Euros 2.1 billion), Euro denominated, eight year tranche paying 7.25%. As security of these loans will be less at the holding company level, Altice paid a commensurately higher coupon for its money than its subsidiary Numericable.

The proceeds of the Altice financing will help it fund its part of a Numericable rights offering to beef up its balance sheet preparatory to the acquisition.

Accordingly Altice is now well along the path to closing the deal; whilst there are several other important conditions raising the bulk of the junk bond financing to pay for it has to date been one of the most critical.



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