Altice USA Is Selling $1 Billion of Junk Bonds

(Bloomberg) -- Altice USA Inc. sold bonds to refinance some of its more than $21 billion debt load in an upsized deal, adding to the busiest week for high-yield sales since September.

The telecom company, through its CSC Holdings LLC unit, issued $1.5 billion of senior unsecured bonds at par to yield 6.5 percent, according to a person with knowledge of the matter, asking not to be identified discussing a private matter. That’s up from a planned $1 billion initially sought, said the person.

The company is taking advantage of the reviving junk bond market, which was all but closed to issuers at the end of last year. Companies including Transocean Ltd. and Tenet Healthcare have sold $4.95 billion of debt through the end of Wednesday.

Altice USA’s 10-year notes, which can’t be bought back for five years, will refinance an outstanding 8.625 percent bond due this year, as well as some of its 10.125 percent notes due in 2023, the person said.

Frequent issuer

Altice USA, the American unit of the Netherlands-based conglomerate controlled by Patrick Drahi, is expected to be a frequent issuer in the high-yield bond market over the next two years, according to Bloomberg Intelligence analyst Stephen Flynn.

The company is likely to refinance around $4.5 billion of high-coupon bonds and repurchase up to $4 billion of shares, he said in a Jan. 15 report. Altice USA was able to boost a bond and loan sale to a combined $2.5 billion up from $1 billion in January 2018, people with knowledge of the matter said at the time.

Last year, Altice USA split from the European company as its billionaire owner sought to appease investors worried about the group’s debt levels. Drahi’s borrowing binge to buy cable assets from Israel to Portugal has left him with a massive pile of junk-rated bonds and loans. Altice’s failed efforts to turn around one of its biggest acquisitions, French telecom company SFR, wiped out a third of its market value and prompted the spinoff of the U.S. unit, which owns Cablevision Systems Corp.

Drahi, who retains a majority of voting rights in the U.S. unit, is trying to cut the debt load at Altice Europe NV, which stood at 30 billion euros ($34 billion) at the end of September. Altice Europe raised 4.3 billion euros of equity in two deals last year by selling stakes in telecom towers and fiber connections assets in France and Portugal.

Credit Suisse Group AG, JPMorgan Chase & Co., Barclays Plc, BNP Paribas SA, Citigroup Inc., Credit Agricole SA, Deutsche Bank AG, Goldman Sachs Group Inc., Morgan Stanley, Royal Bank of Canada, Bank of Nova Scotia and the Toronto-Dominion Bank managed the bond sale, the person said.

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