The world’s best borrowers in 2006
In 2005 there was a marked increase in leveraged finance activity in Greece. Greek mobile phone operator Tim Hellas stands out for a number of reasons, not least the fact that it has executed good deals at opportune moments, raising its money at decent levels and in interesting structures, including a PIK note.
Tim Hellas has been one of the biggest and most interesting issuers in the high-yield market because it has raised €250 million of senior facilities, €1.3 billion of senior secured and unsecured bonds and €500 million PIK, representing a significant landmark for the European high-yield market.
This unique three-layer capital structure allows the sponsors to minimize their equity contribution and maximize returns. The need for funding arose after Tim Hellas had become subject to a leveraged buyout by Apax Partners and Texas Pacific Group, which at €1 billion is the largest leveraged buyout in Greece to date. JPMorgan and Deutsche Bank arranged the financing for the bridge loan. Unusually, the financial sponsors decided to refinancing the bridge loan with just bonds.
Perversely, despite record European leveraged buyout activity over the past couple of years, high-yield bond volumes have disappointed as private equity firms opt for loan, mezzanine and PIK instead.