Magyar Telecom €140 million eight-year notes talked to yield 10¾% to 11%

By Paul A. Harris

St. Louis, July 29 - Magyar Telecom BV's €140 million of eight-year senior notes (Caa1/B-) emerged with price talk of 10¾% to 11% Thursday, according to a syndicate source.

The deal is expected to price on Friday.

Credit Suisse First Boston and BNP Paribas are joint bookrunners for the Rule 144A/Regulation S offering.

The notes will come with four years of call protection.

The company will also obtain a €165 million bank loan.

Proceeds will be used to repay bank debt, fund repayment of a shareholder loan and repay a vendor loan from Vivendi Universal.

Magyar Telecom is a holding company for Invitel, Hungary's second-largest local fixed-line telephone company, formerly owned by Vivendi Universal, now owned by GMT Communications Partners Ltd. and AIG Emerging Europe Infrastructure.

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