VEON buying back $2.43 bln in 2018, 2021 and 2022 notes, to offer new ones
MOSCOW. May 30 (Interfax) - VimpelCom Holdings B.V., a subsidiary of VEON Ltd., has announced an offer to buy back $2.43 billion in Eurobonds from three issues.
The issues concerned are $1 billion in 9.125% notes maturing in 2018, $1 billion in 7.748% notes due in 2021 and $1.5 billion in 7.5% notes to 2022, the company said in a statement.
The offer closes expires on June 27.
The company simultaneously plans to place a new Eurobond issue, and to use all the proceeds to buy the outstanding notes up. The deal will extend the duration of a portion of the VEON debt portfolio.
There are $2.43 billion in 2018, 2021 and 2022 notes outstanding, according to the statement. They include $499.15 million in 2018 notes, which will be repurchased at 4% above face value, although investors tendering notes by June 12 will get 7%, in other words $1,070 per $1,000-note. There are $650.57 million in 2021 notes outstanding, which will be repurchased for $1,121.25 each, or $1,151.25 for early tender; and $1.28 billion in 2022 notes, the offer prices being $1,126.25 or $1,156.25 for early tender.
The company is prepared to buy all notes tendered, assuming new notes are placed. The buyback is being organized by Barclays, Credit Suisse and Merrill Lynch, the agent being Lucid Issuer Services.
The company plans to publish the early tender volume on June 13.
A banking sector source told Interfax that VimpelCom Holdings B.V had mandated Barclays, HSBC, ING and JP Morgan to organize meetings with investors in Europe and the United States with a view to placing a new issue of USD notes. The road show starts on May 31.
VEON is a global telecoms provider headquartered in Amsterdam in which the Alfa-Group, owned by Mikhail Fridman and his business partners, has a 47.9% stake.
VEON's net debt/EBITDA, adjusted for the consolidation of Pakistan's Warid operator, was 2x at end-2016. Aggregate net debt was $7.1 billion. The holding has $2.9 billion in debt to pay off in 2017, Bincluding $1.1 billion owned by it Russian subsidiary PJSC VimpelCom , $1.8 billion in 2018 and $1.3 billion in 2019.
VimpelCom Holdings last placed Eurobonds in the spring of 2016 via GTH Finance B.V., which sold $1.2 billion in notes in two tranches in demand of nearly $8 billion, using the proceeds to pay down internal company debt.
Moody's Investors Service has assigned a provisional (P)Ba2 senior unsecured rating and LGD4 to the new bonds to be issued by VimpelCom Holdings B.V, the agency said in a press release.
Moody's has also placed the Ba3 senior unsecured rating of the outstanding bonds of GTH Finance B.V. guaranteed by VimpelCom Holdings B.V. on review for upgrade. Concurrently, Moody's affirmed VEON Ltd.'s Ba2 corporate family (CFR) and Ba2-PD probability of default (PDR) ratings, the Ba2 issuer rating of VimpelCom PJSC, the Ba2 senior unsecured ratings of VIP Finance Ireland Limited and the Ba2 senior unsecured ratings of the outstanding bond instruments issued by VimpelCom Holdings B.V. and guaranteed by VEON's operating subsidiary VimpelCom PJSC. The outlook on all ratings is stable except for GTH Finance B.V. which is on review.
Fitch Ratings affirmed its long-term osuer default rating (IDR) on VEON Ltd. at "BB+" with stable outlook and assigned a "BB+(exp)" rating to he planned VimpelCom Holdings B.V. unsecured notes.
Standard & Poor's Global Ratings affirmed VEON Ltd's long-term corporate rating of "BB", outlook stable, and rated the planned notes "BB".