Czech private equity fund PPF Arena 1 has set four fixed-income investor meetings in Europe to sound out buysiders for an inaugural senior unsecured euro bond, sources told Reorg. The deal has an initial size of €500 million and is tentatively offered under Reg S with a maturity of either four or six years, the sources added.
The first meeting will take place on Friday,March 15, in Prague. London will follow on March 18, Frankfurt and Munich on March 19, and Amsterdam and Paris on March 20.
HSBC and Societe Generale are global co-ordinators and structuring banks, the sources said. Other bookrunners are Bank of China, BNP Paribas, Citi, Commerzbank, Credit Agricole, Erste Group, ING, PPF Banka and UniCredit.
Investment grade desks are arranging the investor meetings due to its crossover ratings. The borrower was rated Ba1/BB+/ BBB by Moody’s, S&P Global and Fitch today.
PPF Arena 1 combines PPF Group’s portfolio telecommunications businesses in Central and Eastern Europe, including O2 Czech Republic and Cetin, with Telenor CEE, a mobile phone operator in Hungary, Bulgaria, Serbia and Montenegro. It has a 89.73% stake in Baa2 rated Cetin, 67.69% in O2 Czech Republic, and 100% of Telenor.
PFF Group acquired Telenor for €2.8 billion in June 2018. The transaction closed in February. The €3.025 billion debt package was
underwritten in its entirety by Societe Generale.
Proceeds from PFF Arena 1’s debut bond would support the purchase of Telenor. A leveraged loan deal may also be launched to complete the buyout funding, according to sources.
In 2018, PFF Arena 1 would, on a consolidated basis, have generated revenue of €3.2 billion and EBITDA of €1.2 billion. Net leverage ahead of the transaction is at 3.2x,
said Moody’s, and is expected to reach 3.4x in the next 12 to 18 months. The company’s target is between 2.8x and 3.2x and 1.5x for its operating subsidiaries.
The financial structure includes a €200 million revolving credit facility “with ample headroom under the covenants.”