Abu Dhabi Telco Etisalat Seeks Banks To Arrange Debut Bond Deal – IFR

The plan is to use bond market financing to take out a bridge loan signed in connection with the acquisition.



Abu Dhabi-based telecoms firm Etisalat has sent out an invitation to banks to pitch for arranger roles on a potential bond issuance, sources said.

The company is planning to access the bond market to fund part of its 4.2 billion euro ($5.85 billion) acquisition of a 53 per cent stake in Morocco’s Maroc Telecom from Vivendi.

Etisalat said earlier on Thursday that it expects to close the acquisition on May 14.

The plan is to use bond market financing to take out a bridge loan signed in connection with the acquisition. Should it issue, it will be the operator’s maiden public debt offering.

Late last month, the company agreed a dual-tranche 3.15 billion euro facility to fund a large part of its acquisition.

The financing consists of two facilities, which can be used in euros and/or in U.S. dollars, and has been borrowed from a group of 17 international, regional and local banks.

The first tranche is a 12-month bridge loan amounting to 2.1 billion euros at a price of 45 basis points over Euribor for the first six months, and then increasing by 15 bps in each of the following three months.

The second tranche is a 1.05 billion euro three-year loan with a margin of 87 bps over Euribor.

The rest of the purchase price will be funded by an unnamed Abu Dhabi government-owned entity, sources told Reuters last month.