WOM starts tender offer for two series of Kenbourne Invest notes

By Mary-Katherine Stinson

Lexington, Ky., Aug. 26 – WOM SA launched a cash tender offer and consent solicitation to eligible holders of Kenbourne Invest SA’s outstanding 6 7/8% senior notes due 2024 (Cusips: L5831KAA4, 48855KAA8) and 4.7% senior notes due 2028 (Cusips: L5831KAC0, 48855KAC4), according to a notice.

The company is offering to purchase up to a total of $270 million face amount of the notes, with the idea of equally allocating the maximum purchase amount between the two series. If one of the series is undersubscribed, either of the $135 million-per-series sublimits could potentially be adjusted to allow for the maximum purchase total across both notes.

The company is offering to pay a total of $995 per $1,000 of principal for the 2024 notes. This includes an early tender payment of $30 and a consent fee of $12.50.

The total consideration offered for the 2028 notes is $832.50 per 1,000 of principal. This includes an early tender payment of $30 and a consent fee of $17.50.

The early tender payments and the tender offer considerations are subject to proration. The consent payment is not subject to any proration.

Tender instructions are irrevocable except in limited circumstances.

The early tender deadline is 5 p.m. ET on Sept. 9. Those tendering after the early deadline will not receive the early tender payment.

Noteholders have the option of only delivering their consent to the proposed amendments in which case they are only eligible to receive the consent payment. Tendering noteholders are deemed to have given consent to the proposed amendments.

The company is soliciting consents because it recently completed the sale of around 2,000 of its towers to Phoenix Tower International Chile SpA as a sale-leaseback transaction.

The new leases are considered a liability and would be considered debt for the purposes of the note indentures.

The company is additionally already contracted for similar sale-leaseback transactions for towers that are currently under construction.

Accordingly, the proposed amendments in the consent solicitation adjust the definition of consolidated EBITDA, consolidated net leverage and the related definitions to calculate them to essentially exclude the leases.

The proposed amendments would also give the group flexibility to apply current and future asset sale proceeds to refinance existing debt at its prevailing market price.

The company is additionally proposing to reduce the threshold at which it may make any restricted payment from a consolidated net leverage ratio of 3.7x to 3.5x.

The final amendment proposal includes the ability of the group to make a one-time election to apply US GAAP on a consistent bases rather than International Finance Reporting Standards.

The consent solicitations need consents from noteholders representing more than half of the notes.

Early results will be announced on or about Sept. 12, which is also the effective date for the supplemental indenture if the requisite consents have been obtained.

Early settlement is planned for Sept. 13.

The offers will expire at 11:59 p.m. ET on Sept. 23.

Final settlement is scheduled for Sept. 27.

D.F. King & Co., Inc. (212 269-5550, 866 388-7535, wom@dfking.com) is the tender and tabulation agent.

J.P. Morgan Securities LLC (866 846-2874, 212 834-7279) is acting as dealer manager and solicitation agent.

Kenbourne is an investment company based in Luxembourg and acts as a financing vehicle for WOM SA, a cell phone and mobile broadband company with headquarters in Santiago, Chile.

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