Orange Switzerland Said to Plan 250 Million Euros of PIK Bonds

Orange Communication SA is marketing 250 million-euro ($327 million) of 6-year bonds to pay a dividend to Apax Partners LLP, according to a person with knowledge of the deal.

The so-called PIK toggle bonds for the Swiss mobile-phone company could be sold by tomorrow at a discount of up to 0.5 cents on the euro, said the person who asked not to be identified because the information is private. The debt may price to yield between 9 to 9.25 percent. PIK debt let companies pay interest in the form extra debt at maturity.

PIK securities that almost disappeared during the credit crisis are making a comeback as borrowers are seizing the upperhand and showing little concern about the banking crisis in Cyprus. 22 billion-euro of high-yield bonds were sold in Europe so far this year, according to data compiled by Bloomberg.

Orion Engineered Carbons Finance & Co SCA sold $425 million of PIK notes at the end of January, according to data compiled by Bloomberg.

Orange Switzerland, based in Renens, Switzerland, hired Credit Suisse Group AG as global coordinator with Deutsche Bank AG, UBS AG, Citigroup Inc., JPMorgan Chase & Co and Morgan Stanley acting as bookrunners.

The notes are issued at Orange Switzerland’s holding company, Matterhorn Financing & CY SCA. They will trade on the Luxembourg stock exchange and be governed by New York law.

Apax acquired Orange Switzerland in a 1.6 billion-euro leveraged buyout last year.

A spokeswoman for Apax, who requested not to be named citing company policy, declined to comment.

To contact the reporter on this story: Julie Miecamp in London at jmiecamp@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.