Altice/Cablevision downsizes bonds to $5.3 billion, shifts $1 billion to loan; books close Friday

By Paul A. Harris

Portland, Ore., Sept. 24 – Cablevision Systems Corp. downsized its high-yield bond offering to $5.3 billion from $6.3 billion and shifted $1 billion of proceeds to its concurrent term loan, increasing it to $3.3 billion from $2.3 billion, according to a buyside source.

The re-worked bond deal, part of the financing backing the acquisition of the company by Altice NV, is now coming in three tranches instead of the two that were announced earlier in the week.

Included is a downsized $1.5 billion tranche of 10-year senior guaranteed notes (BB-), which come with five years of call protection and are talked to yield 6½% to 6¾% (versus initial guidance in the 6½% area). The guaranteed notes tranche is downsized from $2 billion.

In addition the deal includes a downsized $3.8 billion amount of senior unsecured notes (B-) coming in two tranches.

Included is a tranche of seven-year notes, which come with three years of call protection and are talked to yield 10% to 10¼%.

The unsecured portion of the bond deal also includes 10-year notes, which come with five years of call protection and are talked to yield 10¾% to 11% (versus initial guidance of 9¾% to 10%).

Tranche sizes remain to be determined.

The unsecured portion of the financing is downsized from $4.3 billion. When the deal was announced, that amount was coming as a single tranche of 10-year notes. The seven-year notes were announced along with the resizings on Thursday.

Books for the Rule 144A and Regulation S for life bond deal are scheduled to close at noon ET on Friday, and it is set to price thereafter.

J.P. Morgan Securities LLC, Barclays, BNP Paribas Securities Corp., Credit Agricole CIB, Deutsche Bank Securities Inc., RBC Capital Markets, Scotia Capital, SG CIB and TD Securities are the joint bookrunners.

The issuing entities will be Neptune Finco Corp. and CSC Holdings LLC.

Proceeds will be used to help fund the acquisition of Cablevision by Altice and repay $2.5 billion in existing term loans.

The bank portion of the financing, upsized to $5.3 billion from $4.3 billion, also includes a $2 billion revolver.

Cablevision will be an unrestricted subsidiary of Altice with a separate capital structure; $5.9 billion of Cablevision’s existing notes will be rolled over.

Under the agreement, Cablevision is being bought for $34.90 in cash. The enterprise value of the transaction is $17.7 billion.

Cablevision is a Bethpage, N.Y.-based media and telecommunications company. Altice is a Luxembourg-based cable, fiber, telecommunications, contents and media company.

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