Eircom’s first bonds sale since write-off

Eircom Group plans to sell its first bonds since €1.8 billion of debt was written off last year when senior lenders led by Blackstone Group LP took over the phone company.

It wants to raise €310 million of senior secured notes due in 2020, the company said yesterday. The proceeds will be used to repurchase existing senior facilities, it said.

Eircom’s entire €2.3bn of debt, consisting of a term loan from its lenders, falls due in 2017, according to data compiled by Bloomberg.

“The notes won’t be priced until after an investor roadshow, which is expected to last a week, is complete,” Eircom spokesman Paul Bradley said in an interview.

The bond sale comes after Standard & Poor’s cut its outlook on Eircom this week to negative, saying it faces challenges generating cash as it invests in its network.

Eircom had racked up €4.1bn of gross debt through five ownership changes in 13 years before it filed the country’s biggest creditor protection petition in March 2012.

Its most senior, or first-lien, lenders wrote off 15% of their €2.4bn net loans and took control of the company as more junior creditors lost almost all their investment. The new notes are being sold by the company’s Eircom Finance Ltd.

Bloomberg