UPC/Sunrise launches $2.4 billion and €1 billion of term loans

By Sara Rosenberg

New York, Aug. 12 – UPC/Sunrise held a lender call at 11 a.m. ET on Wednesday to launch $2.4 billion of term loans and €1 billion of term loans, according to a market source.

The debt is split between a $1.2 billion covenant-lite term loan B-1 due January 2029 and a €500 million covenant-lite term loan B-1 due January 2029 at NewCo, and a $1.2 billion covenant-lite term loan B-2 due January 2029 and a €500 million covenant-lite term loan B-2 due January 2029 at UPC, the source said.

Price talk on the term loan B-1 and B-2 debt is Libor/Euribor plus 350 basis points with a 0% floor and an original issue discount of 98 to 98.5, the source continued.

The term loan debt has 101 soft call protection for six months.

The term loan B-1 and term loan B-2 are to be allocated and trade as strips for each respective currency.

Deutsche Bank Securities Inc., BNP Paribas Securities Corp. and J.P. Morgan Securities LLC are the global coordinators and joint bookrunners on the deal, with Deutsche the left lead on the U.S debt. Other joint bookrunners include BofA Securities Inc., Citigroup Global Markets Inc., Credit Suisse, Goldman Sachs and Bank of Nova Scotia.

Commitments for the U.S. debt are due at 5 p.m. ET on Aug. 19 and commitments for the euro debt are due at 7 a.m. ET on Aug. 20, the source added.

Proceeds will be used to help fund the acquisition of Sunrise Communications Group AG for CHF 110 per share, representing a total enterprise value of CHF 6.8 billion, and to refinance existing debt.

Other funds for the acquisition will come from about CHF 3.5 billion of existing cash at UPC’s parent company, Liberty Global.

Upon becoming a wholly owned subsidiary of Liberty Global, Sunrise will become part of the UPC credit pool and targeted leverage for this pool will be 5x, pro forma for this transaction, including vendor financing and leases.

Closing will occur following receipt of requisite regulatory approvals, which the parties expect to receive around year end, and satisfaction of other customary conditions.

UPC/Sunrise is an integrated video, broadband internet, fixed-line telephony and mobile services.

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