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Orange whets high-yield appetites

Issuer: Orange

Amount: $545 million; £200 million; €100 million
Launched: July 17 1998

Issue type: Multi-tranche high-yield bond

Maturity: August 1 1998

Bookrunner: Goldman Sachs

For all the talk of the growth of a high-yield bond market in Europe, it did not take long for it to run into trouble. Investors were already wary of what for them was a new product; many issues were either too small to be anything other than bastardized private placements, or relied on the US market to be sold. All it took was a fear of oversupply in the sector, and jitters in the credit market in general, for the existing issues to widen and for several mooted issues to be postponed.

One of the few which was not postponed was the triple-tranche issue for Orange in mid-July. Its issues survived because it diverted from the norm of European high-yield issues. Although it is a fast-growing company, a type which European investors are still getting to grips with, Orange is large (just shy of the equivalent of $1 billion), is a company with a well known brand name and a history of ebitda data, and is a FTSE-100 company (it had a market capitalization of just over £8 billion ($13 billion) at the time of the bond issues).

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