- French cable operator courting lenders for 1.6 billion euros
- Deal tied to parent company Altice's acquisition in February
Numericable-SFR SAS, the French cable and phone-service provider controlled by billionaire Patrick Drahi, is seeking 1.6 billion euros ($1.8 billion) of loans to help buy out shareholder Vivendi SA.
Numericable is contacting potential lenders in London and New York to get term loans in euros and dollars, according to a person familiar with the talks, who isn’t authorized to speak publicly and asked not to be identified.
The deal is Drahi’s latest foray into high-yield credit markets after a string of loans and bond sales to fund the 3.9 billion-euro Numericable acquisition in February and the $17.7 billion takeover of Cablevision Systems Corp. His company Altice NV and its subsidiaries have 49.2 billion euros of debt, including 7.2 billion euros in term loans, according to data compiled by Bloomberg.
“Altice is setting itself up for an accident and we don’t think investors are compensated for the risks they are running,” said Azhar Hussain, the London-based head of global high yield at Royal London Asset Management Ltd., which oversees about 86 billion pounds ($133 billion). “We are worried about the amount of leverage that the company is starting to operate at in mature cable markets, such as the U.S. The headline numbers there are eye-watering.”
Olivier Gernandt, investor-relations director at Altice declined to comment when asked about the sale.
Numericable’s 1.25 billion euros of May 2024 bonds traded little changed at 98.97 cents on the euro, snapping a two-day loss, according to data compiled by Bloomberg.
Numericable, rated four levels below investment grade by both Moody’s Investors Service and Standard & Poor’s, last borrowed from loan investors in July with an 800 million-euro deal.
Leveraged loan issuance in euros has dropped 29 percent this year to 63.2 billion euros, heading for the lowest in five years, according to data compiled by Bloomberg.