Polkomtel Gets $1.2 Billion in Biggest Polish Company Bonds
January 22, 2012, 10:48 PM ESTBy Pawel Kozlowski and Marta Waldoch
(Adds fund manager comment in third paragraph.)
Jan. 20 (Bloomberg) -- Polkomtel SA, Poland’s second- largest mobile-phone company, raised the equivalent of $1.2 billion in the country’s biggest sale of corporate bonds to help pay for its leveraged buyout.
The junk-rated company sold 542.5 million euros ($700 million) of eight-year bonds as well as $500 million of similar- maturity dollar debt, according to data compiled by Bloomberg. The yield on the euro notes was 12.5 percent, compared with 9.49 percent on the non-investment grade 2018 euro bonds from Polish television network TVN SA.
“This was a huge sale and so they had to offer a solid premium,” said Dariusz Kedziora, a fund manager who helps oversee the equivalent of $2.9 billion at Warsaw-based fund Aviva Investors Poland TFI SA. “The company generates steady cash flows, has a strong position in the market and also good prospects, which helped attract investors.”
The proceeds will repay a bridge loan used in the acquisition of Polkomtel by billionaire Zygmunt Solorz-Zak in June for 18.1 billion zloty ($5.4 billion). The buyout left the company with debt amounting to five times its earnings before interest, tax, depreciation and amortization, according to Moody’s Investors Service.
Warsaw-based Polkomtel’s multi-currency issue surpassed PKO Bank Polski SA’s sale of 800 million euros of bonds in 2010 as the largest by a Polish company, according to data compiled by Bloomberg. Polkomtel’s offering is the biggest junk-rated issue in Europe this year, topping a 250 million-euro bond sale by Fresenius Medical Care AG on Jan. 18, the data show.
Yields Climb
Yields on euro-denominated bonds from TVN, which has debt equal to 4.1 times Ebitda, surged to a record 9.92 percent on Jan. 13 as investors sold riskier assets on concern Europe’s sovereign debt crisis will worsen. Rome-based Wind Telecomunicazioni SpA, Italy’s third-biggest wireless operator, has seen the yield on its 2017 bond climb 365 basis points, or 3.65 percentage points, to 15.88 percent today from its Oct. 27 low, data compiled by Bloomberg show.
Polkomtel, the operator of the Plus network, has about 14 million customers for voice and Internet services from a market of about 38 million residents where its two biggest rivals are Deutsche Telekom AG and France Telecom SA’s Polish unit.
“We were able to close this transaction and I think it will be a benchmark on the market,” Wojciech Pytel, a member of Polkomtel’s management board, said in a phone interview today. “The sale gained a lot of interest and the price was in line with our expectations.”
The bonds were rated B3, seven levels below investment grade, by Moody’s. The sale was managed by Deutsche Bank AG, Credit Agricole SA, Royal Bank of Scotland Group Plc and Societe Generale SA and the bonds were issued by Polkomtel’s Eileme 2 AB unit.
--With Assistance from Ben Martin in London. Editors: Wojciech Moskwa, Stephen Kirkland.
To contact the reporters on this story: Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net; Marta Waldoch at mwaldoch@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
