Telenet launches 75 to 100 million new issuance under Senior Credit Facility
Ø Transaction is another step in previously announced financing framework to increase Net Total Debt/EBITDA ratio[1] to approximately 3.5x 2011 EBITDA by end of 2011;
Telenet Group Holding NV ("Telenet" or the "Company") announces a new issuance of 75 to 100 million under its existing credit facility (the "Senior Credit Facility"). Following the recent voluntary debt exchange and extension process and the issuance of 500 million of debt under the Senior Credit Facility, this transaction is another step in a further optimization of Telenet's capital structure. Telenet has defined a financing framework that will allow for attractive future shareholder disbursements, whilst maintaining flexibility to grow and invest in its business. In order to do so, Telenet intends to increase its Net Total Debt ratio to approximately 3.5x 2011 EBITDA by end of 2011.
The proceeds for the 75 to 100 million issuance will be borrowed from Telenet Finance Luxembourg II S. A. (the "Lender"), an independent financing company, which is proposed to offer 75 to 100 million of Senior Secured Notes due 2016, with a denomination of 50,000 each (the "Notes") for this purpose. The issuance of the Notes is expected to close on November 26, 2010 following a bookbuilding period during which KBC Bank NV and Dexia Bank Belgium NV/SA will place the Notes. If the transaction proceeds, the Lender will enter into the Senior Credit Facility under an additional tranche with maturity in 2016.
The Notes proposed to be issued by the Lender will be secured by a first-ranking security interest over all of the capital stock of the Lender and a first-ranking security interest over the Lender's rights as a lender under the Senior Credit Facility. The Notes are obligations of the Issuer alone and not of - or guaranteed in any way by Telenet Group Holding NV, Telenet NV or any of their subsidiaries or affiliates.
Telenet expects to use the proceeds of the loan for general corporate purposes. These purposes may include future shareholder disbursements in 2011, in absence of potential value-accretive acquisitions. This transaction will further extend the average maturity profile of Telenet's debt and improve the stability of Telenet's debt capitalization by providing additional cash flow flexibility at very attractive market conditions.
As of September 30, 2010, Telenet carried a Net Total Debt ratio[2] of 2.8x EBITDA. Telenet's debt is rated Ba3 (Moody's) and BB+ (Fitch).
[1] Calculated as per Senior Credit Facility definition, using net total debt, excluding subordinated shareholder loans, capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases, divided by last two quarters' annualized EBITDA.
