Invitel €125 million 6.5-yr deal talked at Euribor plus 825 bps area, pricing at 99

By Paul Deckelman

New York, Oct. 13 - Invitel Holdings NV released price talk Friday on its planned offering of €125 million of 61/2-year floating-rate notes. Those bonds are expected to price at 99 with a coupon of 825 basis points over the Euribor rate.

Books are expected to close on the deal at 12 noon, London time, on Monday, with pricing likely shortly afterward.

High yield primaryside sources said the Rule 144A/Regulation S deal is being brought to market via bookrunner manager Credit Suisse and co-manager BNP Paribas. The offering was marketed to investors in a short roadshow that took place on Thursday and Friday in London.

The bonds will be non-callable for the first 18 months; after that, they will be callable at 100, 102, 101, and 100.

The bonds are PIK (payment-in-kind). They include a provision for the coupon to step up by 200 bps after three years if the Hungarian telecommunications provider's operating company leverage remains above 2.5 times earnings.

Invitel, which is Hungary's second-largest fixed-line telecom company, plans to use the anticipated €118 million of net proceeds from the bond deal to repurchase its shares from its two major shareholders, Mid Europa Parteners' EEIF - Emerging Europe Infrastructure Funds - and GMT Communications Partners, which bought the company, then known as Magyar Telecom, from Vivendi Telecom Hungary in 2003.

Key management personnel will not participate in the share buyback. Following the completion of the bond offering and the share buyback, senior management, EEIF and GMT will each own one-third of the company.

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