UPC/Sunrise changes emerge, frees to trade; Avianca extends commitment deadline

By Sara Rosenberg

New York, Aug. 20 – UPC/Sunrise upsized its U.S. term loans and downsized its euro term loans, modified the original issue discount on the U.S. debt and firmed the discount on the euro debt at the tight side of guidance before breaking for trading on Thursday.

Also, Avianca extended the commitment deadline for its tranche A debtor-in-possession delayed-draw term loan B to provide investors with a customary period of time to review the credit agreement ahead of the commitment deadline.

UPC/Sunrise reworked

UPC/Sunrise raised its U.S. covenant-lite term loan B-1 due January 2029 at NewCo to $1.3 billion from $1.2 billion and its U.S. covenant-lite term loan B-2 due January 2029 at UPC to $1.3 billion from $1.2 billion, and scaled back its euro covenant-lite term loan B-1 due January 2029 at NewCo to €400 million from €500 million and its euro covenant-lite term loan B-2 due January 2029 at UPC to €400 million from €500 million, according to a market source.

Additionally, in the morning, price talk on the U.S. term loans and on the euro term loans was changed to a range of Libor/Euribor plus 325 basis points to 350 bps from just Libor/Euribor plus 350 bps. Then, a bit before noon ET, the spread on the loans firmed at Libor/Euribor plus 350 bps, the source said.

Also, the original issue discount on the U.S. term loans was revised to 99 from talk in the range of 98 to 98.5, and the discount on the euro term loans finalized at 98.5, the tight end of the 98 to 98.5 talk.

As before, the term loans have a 0% floor and 101 soft call protection for six months.

UPC/Sunrise breaks

On Thursday, UPC/Sunrise’s U.S. term loans freed up for trading, with the strip of U.S term loan B-1 and term loan B-2 debt quoted at 99¼ bid, 99¾ offered, another source added.

Deutsche Bank Securities Inc., BNP Paribas Securities Corp. and J.P. Morgan Securities LLC are the global coordinators and joint bookrunners on the deal (B1/BB-/BB+), 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.

The loans will be used with about CHF 3.5 billion of existing cash at UPC’s parent company, Liberty Global, to 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.

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.

Avianca moves deadline

Avianca pushed out the commitment deadline for its $1.3 billion tranche A debtor-in-possession delayed-draw term loan B due 18 months from the Chapter 11 filing date to 5 p.m. ET on Wednesday from 5 p.m. ET on Aug. 20, a market source remarked.

The source explained that the lead arrangers intend to post a draft DIP credit agreement to investors this week and the deadline extension will provide investors with time to review the agreement before commitments are due.

Price talk on the term loan is Libor plus 1,000 basis points to 1,050 bps cash/Libor plus 1,150 bps to 1,200 bps PIK with a 0.5% Libor floor that is payable in cash or in-kind at the borrower’s election, and an original issue discount of 98 with a back-end fee of 75 bps.

The term loan has an undrawn commitment fee of 50 bps from days 0 to 30, 33% of the drawn spread from days 31 to 60, 50% of the drawn spread from days 61 to 120 and 100% of the drawn spread thereafter.

Of the term loan amount, $900 million is new money and about 2/3 will be drawn at close.

Avianca lead banks

Goldman Sachs Bank USA and J.P. Morgan Securities LLC are the joint lead arrangers on Avianca’s DIP term loan.

Proceeds will be used to fund expenses and operations in Chapter 11, to roll-up of existing pre-petition claims and for general corporate purposes.

Avianca is a Bogota, Colombia-based airline holding company that filed bankruptcy on May 10. The Chapter 11 case number is 20-11133.

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