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United Group to place 1.05 bln euro bond to fund buy of Bulgaria's BTC

Author Mario Tanev
United Group to place 1.05 bln euro bond to fund buy of Bulgaria's BTC Author: Vivacom. License: All rights reserved.

SOFIA (Bulgaria), January 24 (SeeNews) - Dutch-based telecommunications and media company United Group intends to issue a 1.05 billion euro ($1.16 billion) fixed and floating bond due 2026 and a 575 million euro fixed rate bond due in 2028 in order to finance its acquisition of Bulgarian Telecommunications Company (BTC) and refinance a previous issue, according to data from ratings agency Moody's Investor Service.

Moody's has assigned a B2 rating to both proposed issues, it said in a statement earlier this week.

In addition, Summer Bidco intends to offer a 170 million euro pay-if-you-can (PIC) bond due 2025. Both Summer Bidco and United Group are part of Adria Midco.

The 1.05 billion euro issue and the 170 million euro PIC issue will be used to fund United Group's acquisition of BTC, which operates under the brand name Vivacom. The 575 million euro issue, due in 2028, will be used to refinance an issue with a similar size, due in 2022.

"While Adria's leverage will increase to around 5.8x in 2020 following the acquisition of Vivacom, we expect the company to reduce leverage below 5.5x by 2021, supported by sustained revenue and EBITDA growth prospects," Agustin Alberti, a Moody's vice president and lead analyst for Adria, said in the statement.

In November last year, United Group said that it has agreed to acquire BTC, but did not disclose the price of the transaction.

BTC, which has over 1.8 million customers in Bulgaria, competes with A1 Bulgaria, a unit of A1 Telekom Austria, and Telenor Bulgaria, a unit of Czech-owned PPF Group.

($ = 0.9047 euro)