Egypt’s
The deal draws together two significant names in the European high-yield bond market – TIM Hellas and Weather’s majority owned emerging markets operator
One market observer suggested the alignment of credits might see some investors reorder high-yield portfolios to spread any potential risk. After the acquisition announcement, Fitch maintained TIM Hellas’s issuer default rating at B with a stable outlook.
Sponsors
That decision to pitch auction bidders against returns available in the high-yield market paid off with the announcement of the eventual sale. Weather was not among the bidders to submit a binding offer by November 30, but came to this latest deal buoyed by the success of Orascom’s hugely oversubscribed €750m bond.
Orascom increased the size of the issue from a planned €500m, having attracted a book of US$11bn. The success indicated the extent to which the emerging markets telecoms company has emerged as a respected high-yield credit since the buyout of Wind.
Weather’s acquisition will trigger a mandatory change of control tender at 101 for TIM Hellas’s €2.9bn outstanding bonds, but that is well below the secondary trading level of any of the four elements of the TIM Hellas structure. TIM Hellas was refinanced in a €1.4bn three-part offering in December through Deutsche Bank, JPMorgan, Lehman Brothers and Morgan Stanley.
The December deal not only provided a bridge to a sale but also generated a cash dividend for the sponsors just two months before disposal. That rapid series of returns is likely to be the focus of envious looks from other sponsors approaching exits.