Eircom to Sell First Bond Since $2.35 Billion Debt Write-Off

Eircom Group plans to sell its first bonds since 1.8 billion euros ($2.35 billion) of debt was written off last year when senior lenders led by Blackstone Group LP took over the Irish phone company.

It wants to raise 310 million euros of senior secured notes due 2020, the Dublin-based company said in a statement today. The proceeds will be used to repurchase existing senior facilities, it said. Eircom’s entire 2.3 billion euros of debt, consisting of a term loan from its lenders, falls due in 2017, according to data compiled by Bloomberg.

“The notes won’t be priced until after an investor roadshow, which is expected to last a week, is complete,” Eircom spokesman Paul Bradley said in an interview.

The bond sale comes after Standard & Poor’s cut its outlook on Eircom this week to negative, saying it faces challenges generating cash in the next two years as it invests in its network. It affirmed its B rating on the former state-owned telecommunications company, five levels below investment grade.

Eircom had racked up 4.1 billion euros of gross debt through five ownership changes in 13 years before it filed the country’s biggest creditor protection petition in March 2012. Its most senior, or first-lien, lenders wrote off 15 percent of their 2.4 billion-euro net loans and took control of the company as more junior creditors lost almost all their investment.

The new notes are being sold by the company’s Eircom Finance Ltd.

To contact the reporter on this story: Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net; Shelley Smith at ssmith118@bloomberg.net

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