Cyfrowy Polsat Group entered into a facility agreement with a consortium of Polish and foreign financial institutions comprising a term facility of up to PLN 11.5 billion and a revolving facility of up to PLN 1 billion, which, together with Series A unsecured bearer bonds with the total nominal value of PLN 1 billion, issued in July of this year, will be used to refinance the whole Group indebtedness. Both the corporate loan, which is the largest loan in PLN to date, and the bonds issue, substantial in size for the Polish market, will provide the Group with interest savings of PLN 380 million annually.
“I am very happy that five months of very intensive work on the refinancing project regarding the current indebtedness of our Group has ended in such a spectacular success. Both the credit facility and the bond issue attracted a lot of interest on the part of financial institutions, leading to oversubscription and, in consequence, a considerable reduction in the offers. Although a number of favorable factors accompanied the whole process, we did work in relatively difficult market conditions. Hence we are even more pleased to be able to raise new funding for our whole indebtedness on very good terms and in PLN only”, says Tomasz Szeląg, Management Board Member in charge of Financing in Cyfrowy Polsat and Polkomtel. “According to our assumptions, and thanks to the process we implemented, we managed not only to generate interest savings of approximately PLN 380 million annually but also gained greater flexibility and security for our operations, as well as a simplified indebtedness structure, which, without a doubt, will have a positive impact on our operations and the future development of the Group”, adds Tomasz Szeląg.
The leaders of the consortium of Polish and foreign financial institutions that are to grant the Cyfrowy Polsat Group credit facility of the total value of PLN 12.5 billion, i.e. a term facility of up to PLN 11.5 billion and a revolving facility of up to PLN 1 billion, are Powszechna Kasa Oszczędności Bank Polski S.A., Bank Zachodni WBK S.A., ING Bank Śląski S.A., Société Générale as global banking coordinators, with the participation of PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 1, PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 2, BNP Paribas Fortis SA/NV, Bank Polska Kasa Opieki S.A., The Bank of Tokyo-Mitsubishi UFJ Ltd., Bank of China (Luxembourg) S.A., Credit Agricole Corporate & Investment Bank, Credit Agricole Bank Polska S.A., DNB Bank Polska S.A., DNB Bank ASA, HSBC Bank Polska S.A., HSBC Bank plc, Bank Handlowy w Warszawie S.A., CaixaBank, S.A. Oddział w Polsce, mBank S.A., Bank Millennium S.A., Raiffeisen Bank Polska S.A., Goldman Sachs Bank USA, Erste Group Bank AG, Deutsche Bank Polska S.A., and UniCredit Bank AG, London Branch, acting as Facility Agent and Security Agent.
The executed facility agreement will be utilized in particular in the repayment of the entire indebtedness arising from the senior facility agreement of Cyfrowy Polsat of 11 April 2014, and the repayment of the whole indebtedness arising from the senior facility agreement of Polkomtel of 17 June 2013, repayment of the whole indebtedness under the senior notes issued by Eileme 2 AB (publ), as well as to finance the general corporate needs of the Capital Group.
The Group’s new credit facilities will bear interest at a variable rate equal to WIBOR for the relevant interest period plus the margin. The margin depends on the ratio of the net consolidated indebtedness/consolidated EBITDA and will decrease along with the decrease in the ratio itself. The period of the facility is 5 years from the date of execution of the facility agreement and the final repayment date for each of the facilities is 18 September 2020.
Complementary to the refinancing process with respect to executed credit facility agreement are the 6-year unsecured Series A bearer bonds, issued in July this year, with the total nominal value of PLN 1 billion. They bear interest at a variable rate equal to WIBOR 6M plus 250 bps margin (with the debt ratio in a given period lower than or equal to 3.5:1). The margin increase depends on the debt ratio specified in the indenture. Interest payments under the bonds will be made every half a year.
“This bonds issue, which was large for the Polish market, popular among investors and ended with a very attractive margin for us, was the first stage of the refinancing process – thanks to which we managed to diversify our sources of financing, become more flexible business-wise and more motivated to move on to the second stage, i.e. execution of the credit facility agreements”, comments Tomasz Szeląg.
Major benefits arising from the completed refinancing process of the Group are as follows:
- decrease in average interest expenses by approximately 3 percentage points, i.e. to approximately 3.6%;
- significant interest savings of PLN 380 million annually;
- positive change in the currency structure: PLN only;
- diversified sources of financing: banks and Polish bondholders;
- standardized covenants of Cyfrowy Polsat and Polkomtel;
- limited and consolidated collaterals, which may be released when the debt ratio falls below 1.75x;
- increased business and financial flexibility of the Group: lack of constraints on cash flow improves liquidity management,
- greater flexibility with respect to future investments;
- potential positive impact on the Group’s rating: increased flexibility and a decrease in interest expenses expected to support perspective of ratings.
Modification of the indebtedness structure will end in January 2016, following the repayment of the indebtedness under the Polkomtel senior notes.
“A consistent refinancing process, a number of favorable provisions in the new credit facility agreement, diversified sources of financing, the attractive terms of both facilities, as well as increased business and financial flexibility will, without a doubt, have an impact not only on considerably decreasing debt servicing costs, but also, importantly, on our future efficient and regular reduction of the Group’s indebtedness”, summarizes Tomasz Szeląg.
Trigon Dom Maklerski is the financial advisor and coordinator of the refinancing of indebtedness of Cyfrowy Polsat Group, while Greenberg Traurig is the legal advisor.