Altice France raises 350 million euros to push back its debt wall

2023-12-21 18:19:00

Push the debt wall back as far as possible. This is Altice France’s priority today. The parent company of the operator SFR discreetly raised 350 million euros on the bond markets this Wednesday. In detail, this placement, which was carried out by the American investment bank Goldman Sachs, displays a coupon of 11.5%, but with an issue price of 97 euros. Reimbursement is scheduled for February 1, 2027. In a press release, Altice France specifies that this windfall will be used to repurchase part of its debt maturing in 2025. Knowing that before this operation, Patrick Drahi’s group had to repay , on this date, no less than 1.65 billion euros.

This bond issue is, in any case, instructive. Firstly, this operation proves costly for Altice France. Asked by The TribuneGilles Frisch, responsible for High Yield management at Meeschaert Asset Management, points out that the telecoms group “had to agree to a cost of 2.5% more annually to issue a new bond”.

A debt of 24 billion euros

In fact, he explains, the total cost of this bond issue, for Altice France, is not 11.5%, but 12.5%, taking into account the issue price, here lower than the face value. Gold « comparable existing debts (with a strain of 5.875% maturing at the same time) were trading at a price of 89 euros, or a yield of 10%, before this private placement”deciphers Gilles Frisch.

He also notes that this operation is almost identical to that carried out in 2011-2012 by Numericable. At the time, this operator, which Patrick Drahi used to buy SFR in 2014, was “in a very difficult situation”, recalls Gilles Frisch. Numericable then issued a bond debt under similar conditions to postpone the maturity of its debt.

With this new refinancing operation, Altice France wants to reassure its debts, which amount to more than 24 billion euros. The group is faced with significant repayment deadlines: 1.65 billion euros in 2025, then 1.33 billion euros in 2026, before 5.5 billion euros in 2027.

To reduce its debt, Patrick Drahi wishes to sell assets, and has even opened the door to a sale of part of SFR’s capital. The new bond issue aims, according to Gilles Frisch, to appease investors. « Discussions to sell assets take longer than expectedhe says. In the meantime, Altice wants to continue to reassure investors regarding liquidity risk, and therefore quickly manage the 2025 debt maturities.”

Declining sales

In parallel with these financial operations, SFR continues to suffer in France, where it is losing subscribers in both mobile and fixed Internet. In the third quarter, its sales fell by another 2.8%, to 2.7 billion euros.