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CETV screens high yield re-run with euro market all to itself
September 11, 2009
Central European Media Enterprises (CETV) priced a seven year non-call four senior secured bond on Thursday. The bond was offered with a 11.625% coupon, issued at 98.621%, to yield 12%. Initial price talk on Thursday morning was 12% to 12.25%.
The book was oversubscribed and the deal size increased from the Eu150m mooted on Monday to Eu200m.
"The timing was great because they had the entire euro market to themselves — no other euro deal was out there so investors focused on this one," said one of the bookrunners.
"It comes at a very nice yield. This is exactly the sweet spot that a lot of investors are looking for."
There is a make whole call of 50bp over Treasury until September 15 2013. The bond is then callable at 105.813% until September 15 2014, at 102.96% until September 15 2015 and at par thereafter.
Bankers expected to target core high yield accounts rather than emerging market funds on the roadshow, which started in London on Tuesday, moved to Edinburgh on Wednesday and to Paris and Frankfurt on Thursday.
"Although the company’s operations are in central and Eastern Europe it’s not seen as an emerging markets deal," said a banker on the deal. "Traditionally it has been bought by high yield accounts."
Eventually, about 80% of the offering went to European high yield funds and about 20% to emerging markets accounts.
"I’m not hugely surprised that people are willing to step across," said a high yield banker in London."There’s clearly opportunity, albeit with risk, in that region."
Like the other high yield bond offerings in Europe this year, CETV intends to use the proceeds from its issue to repay debt. That includes a Eu127.5m loan from the European Bank for Reconstruction and Development (EBRD), while it will also be tendering for some of its existing bonds.
Bank of America Merrill Lynch, BNP Paribas and Deutsche Bank were the bookrunners.
The borrower has several existing loans and high yield bonds. It signed a Eu150m loan in 2007, which is due to mature in May 2011, with a Eu75m EBRD term loan ‘A’ and a syndicated Eu75m term loan ‘B’.
In May 2007 it issued a Eu150m bond due in May 2014 and in April 2005 it issued Eu370m of bonds in a two-tranche deal split into Eu245m 8.25% notes due May 2012 and a Eu125m tranche priced at 550bp over six month Euribor.
CETV reported net revenues of $186.2m for the second quarter of 2009, down 38.9% compared with the second quarter of 2008. Its net income from continuing operations fell from $43.4m to $22.1m. The company has a market capitalisation of around $1.79bn.
For additional information, please contact:
Romana Wyllie
Vice President of Corporate Communications
Central European Media Enterprises
Krizeneckeho nam. 1078/5
152 00 Praha 5
Czech Republic
+420 242 465 525
romana.wyllie@cme.net
