Early talk suggests that the €1.1bn acquisition of an 81% stake in TIM Hellas Telecommunications by Apax Partners and Texas Pacific Group will be heavily financed in the high-yield bond market with a senior secured note. JP Morgan and Deutsche Bank are leading the deal, which is expected to total about €900m.
Senior secured bonds are nothing new. Czech mobile operator Oskar Mobile sold a €325m senior secured bond at par to yield 7.5% in October. Concordia Bus also sold €130m of 5.5-year, non-call three senior secured bonds to take out its bank debt as part of its restructuring last year.
Swiss cable company Cablecom became the first performing credit to take out all its bank facilities with capital markets debt, issuing SFr1.275bn equivalent of senior secured floating-rate notes last month.
Telecom Italia is selling its 81% stake in TIM Hellas and the acquisition is expected to close in July. Apax and TPG are buying 80.87% of the business. The €16.43 per share offer represents a 17.6% premium to TIM Hellas’ six-month average ADR price based on the current exchange rate.
TIM Hellas had 2.3m customers as December 31 2004. It reported sales for 2004 of approximately €840m on operating income of about €121m.