TDC’s record €8.5bn LBO debt goes to market

The €8.5bn senior debt backing the US$15bn buyout of Danish telecommunications giant TDC, the largest buyout in European history, has been launched to sub-underwriters through MLAs Barclays, Credit Suisse, Deutsche Bank, JPMorgan and RBS. Nordea, SEB Merchant Banking, Danske Bank and DnB Nor joined ahead of launch.

Senior debt comprises a €2.1bn seven-year term loan A at 225bp over Euribor, a €2.85bn eight-year term loan B at 275bp, a €2.85bn nine-year term loan C at 325bp and a €700m seven-year revolver at 225bp.

Subordinated debt comprises a €1.1bn four-month cash bridge paying 75bp–225bp, a €245m 11-year PIK note at 13.75%, and a €2.275bn 18-month high-yield bridge paying 675bp over Euribor for the first six months and then rising 50bp every three months until maturity. The MLAs hope to take the deal out in the high-yield bond market this year.

Banks are asked to sub-underwrite €250m with a €150m target final hold for 150bp and €175m with a €100m target final hold for 135bp.

Senior net debt to Ebitda (including the outstanding bonds, for which there is a tender) is 4.4x, while total cash pay leverage is 5.6x. A bank meeting was to be held in London on Friday, February 10.

The sponsors, bidding through specially created acquisition vehicle Nordic Telephone, comprise Apax Partners, Blackstone, KKR, Permira and Providence Equity Partners.

The deal eclipses the previous record for a European buyout, which was Egyptian mogul Naguib Sawiris’ buyout of Italian telecommunications company Wind last year.