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Altice Puts Together Cablevision Financing

Altice continues to line up financing for its pending $17.7 billion purchase of Cablevision Systems, raising about $8.6 billion in new debt and readying the placement of about $1.8 billion of its own stock.

Altice announced Sept. 17 that it planned to acquire Cablevision in a deal including about $10 billion in cash and $7.7 billion in assumed debt. The transaction is expected to be completed in the first half of 2016. 

Altice agreed in May to acquire privately held mid-sized cable operator Suddenlink Communications for about $9.1 billion. With Cablevision’s 2.6 million video customers, Altice would have nearly 4 million video customers in the U.S., making it the fourth largest cable operator in the country.

There had been some concern that raising the debt for the Cablevision deal would be costly, as interest rates on high-yield debt deals have risen in the past several weeks. 

According to Altice, it raised $8.6 billion in new debt, including a $3.7 billion 7-year senior secured term loan; $1 billion of 10-year senior guaranteed notes and $3.8 billion of 7-year  and 10-year senior  unsecured notes.

Altice said the average cost of the Cablevision financing is 7.6% and the average tenor is 7.9 years. When combined with the retained debt at Cablevision ($5.9 billion), the total Cablevision debt financing is about $14.5 billion, with an average tenor of 6.7 years and average cost of 7.5%. In addition, Cablevision has secured a 5 year $2 billion revolving facility, ensuring ample room to meet Cablevision’s liquidity needs.

Regarding the stock sale, Altice said Thursday that it has successfully placed $1.8 billion in newly issued shares, including 69.99 million  Altice A shares  at $19.05 per share and 24.8 million Altice B shares  at a price of $19.05 per share.

Application will be made to list the placing shares on the Euronext Amsterdam exchage. Settlement is expected to take place on Oct. 5 and is subject to customary closing conditions, at which date the placing shares are expected to be admitted to trading on Euronext Amsterdam. Altice has agreed, subject to customary carve-outs, to a 90 day lock-up on its class A and class B shares. J.P. Morgan acted as Sole Global Coordinator and Bookrunner. Barclays, BNP Paribas and Goldman Sachs International acted as Joint Bookrunners for the placing.