United Group rejiggers tranche sizes as it launches €1.25 billion three-part notes offering

By Paul A. Harris

Portland, Ore., Jan. 24 – United Group resized tranches as it launched its €1.25 billion three-part offering of high-yield notes on Wednesday, according to market sources.

A downsized €300 million tranche of seven-year senior secured fixed-rate notes, non-callable for three years, launched at par to yield 6¾%. The tranche size decreased from €350 million. The yield comes inside of yield talk in the 7% area. Initial talk was in the low-7% area.

An upsized €650 million tranche of seven-year senior secured floating-rate notes, non-callable for one year, launched with a 425 basis points spread to Euribor, with no floor, at par. The tranche size increased from €600 million with the shift of proceeds from the fixed-rate secured notes. The spread comes at the tight end of the 425 bps to 450 bps spread talk (initial talk was 450 bps to 475 bps). The price comes at the rich end of the 99.5 to par price talk (initial talk was 99.5).

A €300 million tranche of five-year pay-if-you-can PIK notes, non-callable for one year, launched with a PIK yield in the 11% area, including a discount expected to come in the range of 99 to par, on top of yield talk and price talk. Initial PIK yield talk on the PIK notes was 11¼% to 11½%.

Books were set to close during the London afternoon.

JPMorgan is the lead.

The Amsterdam-based telecom plans to use the proceeds to repay fixed- and floating-rate notes due 2026 and to repay debt under its revolver.

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