Drahi Markets $14 Billion of Bonds in World’s Biggest Junk Deal

Patrick Drahi met investors today to start marketing the biggest high-yield bond sale globally to finance his $23 billion acquisition of French phone company SFR.

The billionaire is raising more than 10 billion euros ($14 billion) of debt through his companies Numericable Group SA (NUM) and parent Altice SA (ATC), according to a person familiar with the matter. The bonds will be in dollars and euros and carry maturities of as much as 10 years.

Drahi, who met investors in London today, is taking advantage of demand for high-yield corporate debt to raise the largest leveraged financing for a European acquisition. Banks agreed to underwrite 11.64 billion euros of loans and bonds to a combined Numericable and SFR, as well as the debt for Altice.

“This is a sector everyone in the high-yield market knows,” said Tatjana Greil Castro, a London-based portfolio manager at Muzinich & Co. Ltd., which manages about $27 billion in credit. “We believe that everyone will trade it and everyone will follow it.”

Charles Fleming, a spokesman for Altice employed by Havas SA, declined to comment on the terms of the financing.

Numericable plans to issue about 6 billion euros, while Altice wants to raise 4.15 billion euros. Numericable’s bonds mature in five, eight and 10 years, while Altice’s notes are due in 2022, the person said.

Photographer: Balint Porneczi/Bloomberg

Numericable started syndicating more than 6 billion euros of loans last week. Close

Numericable started syndicating more than 6 billion euros of loans last week.

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Photographer: Balint Porneczi/Bloomberg

Numericable started syndicating more than 6 billion euros of loans last week.

Four Seasons

Investor meetings are planned to take place at the Four Seasons Hotel in London’s Park Lane tomorrow, according to a person familiar with the matter, who asked not to be identified because the meetings are private. Meetings will also take place next week, at the Four Seasons Hotel George V in Paris on April 22 and at the Steigenberger Frankfurter Hof in Germany on the same day.

Numericable’s debt is rated Ba3 or three levels below investment grade by Moody’s Investors Service, according to a statement. Altice’s proposed bonds are rated B3, three grades lower, the ratings company said on Friday. Leveraged loans and junk bonds are graded below Baa3 at Moody’s and BBB- at Standard & Poor’s.

Numericable started syndicating more than 6 billion euros of loans last week. The Champs-sur-Marne, France-based company is offering an interest margin of 350 basis points to 375 basis points more than benchmark rates on six-year term loans, according to data compiled by Bloomberg.

Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are coordinating the debt financing. Barclays Plc, BNP Paribas SA, Credit Agricole SA, Credit Suisse Group AG, ING Groep NV and Morgan Stanley are also arranging the deal.

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

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net Tom Freke, Michael Shanahan

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