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Tugnait: expects management to
turn Tim Hellas around |
A market that had spent the summer holidays worrying about oversupply lapped up what was in mid-October still the only European high-yield jumbo of the autumn.
Greek mobile phone provider Tim Hellas’s €925 million senior secured portion sold at three-month Euribor plus 350 basis points, achieving the aim of borrowing at bank loan prices while attracting a mix of investors and incurring less restrictive covenants. The €355 million senior unsecured tranche carries an 8.5% coupon.
Tim Hellas’s appeal sprang partly from its being the only large deal in the market but was also based on the company’s prospects. “We participated because we believe management can turn Tim Hellas around,” says Kam Tugnait, European high-yield portfolio manager at Standard Asset Management. Fitch has said that Tim Hellas’s proposed acquisition of rival Greek mobile operator Q-Telecom could boost its competitive position.
The senior tranche of Tim Hellas is only about 3.5 times levered, and the subordinated is less than five times levered. “The asset coverage is fairly good too,” says Tugnait.
With Wind, Amadeus, and ISS all still waiting to refinance, investors had been worried that issuers would flood Europe with high yield. “Everyone’s looking at supply, and at the moment in Europe the calendar is still fairly light and manageable,” says David Bugge, managing director, leveraged finance, at Deutsche Bank, which underwrote the deal with JPMorgan. “That is the key. This provides a good benchmark for Wind.”