Altice prices $4.57 billion equivalent five-part notes inside talk

By Paul Deckelman

New York, Jan. 30 – Altice International was heard by high-yield syndicate sources to have priced its long-awaited $4.57 billion equivalent five-tranche dollar- and euro-denominated bond deal on Friday.

The offering consists of three dollar-denominated tranches and two euro-denominated pieces, issued by three separate subsidiaries.

Altice Financing SA priced $2.06 billion of eight-year senior secured notes (B1/BB-) at par to yield 6 5/8%, inside of pre-deal market price talk set Thursday envisioning a yield in the 6¾% area; that talk had tightened from earlier whispers pegging the bonds in the low-to-mid 7% neighborhood. The spread over comparable Treasuries was 506 basis points.

Altice Financing also priced €500 million of such eight-year senior secured notes at par to yield 5¼%, inside of price talk in the 5 3/8% area; whispers had put that yield in by 125 bps from the dollar tranche, or around the low-6% space. The notes priced at a spread of 509 bps over the comparable German Bund security.

Both of those tranches will carry three years of call protection.

Altice Finco SA priced $385 million of 10-year senior unsecured notes (B3/B-), at par to yield 7 5/8%, inside of price talk in the 7¾% area, versus earlier whispers of a yield in the mid-to-high 8% range. The spread over Treasuries was 596 bps. The notes carry five years of call protection.

Altice SA priced $1.48 billion – downsized from the originally announced $1,775,000,000 – of 10-year senior unsecured notes (B3/B) at par to yield 7 5/8%, inside of talk in the 7¾% area. That price talk had tightened from earlier whispers in the market suggesting that the dollar tranche’s yield would likely be somewhere in the mid-8% region. It priced at a spread of 596 bps over Treasuries.

Altice SA also priced €750 million of such 10-year senior unsecured notes – upsized from €500 million originally – at par to yield 6¼%, inside of talk set in the 6 3/8% area, and well inside of initial whispers that the euro piece would price 125 bps inside the dollar tranche, or somewhere in the low-7% vicinity. The tranche priced at 592 bps over the comparable Bund.

Both of those 10-year tranches, like the Altice Finco tranche, carry five years of call protection.

The Rule 144A and Regulation S deal was brought to market via a hefty roster of joint bookrunners, including Goldman Sachs & Co., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. Morgan Stanley & Co. LLC, BNP Paribas Securities Corp., Credit Agricole CIB, ING, Banka IMI, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Nomura Securities International, RBC Capital Markets Corp., SG CIB and UniCredit Group.

Goldman Sachs is acting as the left lead bookrunner for the two Altice Financing SA secured eight-year tranches and the Altice Finco SA unsecured 10-year tranche, while JPMorgan is the left lead on the two Altice SA 10-year unsecured tranches.

The regularly scheduled forward calendar offering was marketed to potential investors via a roadshow that began last Friday and then moved on to New York on Monday and Tuesday, to Boston on Wednesday and to the West Coast of the United States on Thursday.

Market participants reported that interest in the deal was intense and said that the tranches were oversubscribed.

Altice, a Luxembourg-based telecommunications and cable company, is also doing a €825 million equivalent seven-year first-lien term loan B financing (B1/BB-), split into $500 million and €400 million tranches

It priced the dollar portion at 425 bps over Libor, at the tight end of revised price talk of 425 bps to 450 bps over Libor. Earlier talk was 500 bps to 525 bps. The euro tranche priced at 425 bps over Euribor, at the tight end of revised talk of 425 bps to 450 bps. Earlier talk was 475 bps to 500 bps.

Both loan tranches have a 1% floor and have an OID of 99.0 and 99.5, respectively, and a 101 soft call.

The proceeds from the bond and bank financing will be used to back the acquisition of Portugal Telecom assets by Altice from Brazil’s Grupo OI.

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