That the waiver is finding support despite these concerns is testimony to the liquid market and investors’ realisation that they want to maintain good relationships with sponsors, like Cinven, which have a huge capacity for future buyouts.
Numericable’s 2006 deal comprised a €685m seven-year term loan A at 212.5bp over Euribor, a €1.565bn eight-year term loan B at 250bp and a €175m seven-year capex facility at 212.5bp plus the subordinated debt.
That deal struggled in syndication and it was flexed so that €250m from the A and capex tranches were shifted into the B tranche. BNP Paribas, Calyon, Lehman Brothers and Morgan Stanley were bookrunners.
Investors in the second lien and mezzanine pieces will be taken out at par plus prepayment fees. BNP Paribas is rumoured to have added the prepayment fee only after ferocious pushback from investors when a planned par takeout was mooted. The tranches becoming redundant are callable at 102 until June, however, so such a move would have made a mockery of the concept of call protection.
Waiver fees have not been offered to senior investors who will remain in the revised structure. New and existing senior facilities will rank pari pursue and the absence of compensation and loss of the buffer provided by the former subordinated tranches might leave investors feeling doubly hard done by.