(Bloomberg) -- Altice International, one of the three branches of billionaire Patrick Drahi’s troubled telecommunications empire, has won some time to tackle its debt load by refinancing a bond in the loan market.
The firm raised €800 million ($846 million) — up from the €500 million originally marketed — in a term loan due Oct. 2027 via borrowing unit Altice Financing. Priced with a discount of 96 and a margin of 5 percentage points over Euribor, it will redeem a €600 million junk bond due in Jan. 2025 and repay drawn amounts of the revolving credit facility.
The deal caps months of tumult for the wider Altice group following a corruption probe and growing investor concern about the impact of higher interest rates on its debt load of almost $60 billion.
Altice International’s management told investors in August the company would come to market in the second half of the year to address 2025 maturities and potentially debt coming due in 2026. The unit’s weighted average cost of debt was 5.1% in the second quarter, compared to 4.1% a year before.
The decision to refinance bonds with a loan would allow Altice International, which has operations in Portugal, the Dominican Republic and Israel, to control the process “somewhat more easily than braving the bond market,” wrote CreditSights analysts including Mark Chapman in a note earlier this week. A “material” discount would also be tempting to CLO investors, they added.
Earlier this month, Drahi, alongside managers of the different businesses, met with investors in London and New York to allay concerns around leverage, sluggish performance and an ongoing investigation of co-founder Armando Pereira.
The telco billionaire said that the group is considering all options across the three silos, including the sale of a minority stake in the French unit SFR, to delever the business.
--With assistance from Colin Keatinge.
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