Getting in early: Virgin Media and O2 win with opportune tap

摘要

Liberty Global's VIRGIN MEDIA and Telefonica's O2 have raised a £5.7bn financing that, having received an overwhelming reaction in the leveraged market, confirmed the wisdom of a decision to take out a £4bn investment-grade bridge loan earlier than expected to take advantage of strong demand and a weak pipeline. The £5.7bn-equivalent of debt, which takes out the bridge that was placed in May to back the US$38bn merger of the two telecoms companies, closed broadly in line with expectations and comprised a £1.5bn Term Loan A, a £1.7bn covenant-lite Term Loan B and £2.5bn of high-yield bonds, which were oversubscribed and priced towards the tight end of guidance. "Considering it was Labor Day, it is a multi-billion transaction with five tranches [sold down], and the M&A is not closing until next year, it went very, very well," a senior banker said. Euro loan investors had four days to review the deal and US loan investors and all bond investors had three days, in keeping with the quick timeframe seen on previous Liberty deals. Despite its size, the financing was seen as straightforward and uncontroversial, enabling it to close quickly.