In a closely fought category, Italian mobile communications giant Wind Tre caught the judges’ attention with an ambitious refinancing of its entire corporate debt and capital structure. Wind Tre was named winner in the Bonds above £750m category and Overall Deals of the Year Awards winner for 2017.
In October last year, Wind Tre priced a £9.6bn issuance, in a four-part, cross-border secured bond offering, along with a five-year term loan and a €400m revolving credit facility (RCF).
The new debt package, consisting solely of secured bonds, de-risks Wind Tre’s financing and lowers its costs through reduced interest payments.
The transaction represents the largest-ever refinancing by a European issuer involving sub-investment-grade loans and high-yield bonds, and the largest high-yield bond offering globally for 2017.
It was the third-largest cross-border financing involving sub-investment-grade loans and high-yield bonds, and the largest high-yield transaction from a European issuer since 2014
It was the third-largest cross-border financing involving sub-investment-grade loans and high-yield bonds, and the largest high-yield transaction from a European issuer since 2014.
A recent improvement in Wind Tre’s credit profile allowed it to put in place an all-senior secured capital structure, which has brought the company significant cash interest savings, lowering its average interest rate from around 5.5% to 2.7%, saving an estimated €0.25bn, and improving the company’s cash generation.
The company managed to secure long-term financing, with an average maturity of six years across the four tranches, providing operational and financial flexibility. The completed refinancing enabled Wind Tre to repay all outstanding notes and credit facilities.
A backdrop of quantitative easing and an associated flattening of yield curves and compression of spreads across the board have presented a significant opportunity for sub-investment-grade credit in the market.
What impressed the judges in this case was the scale of Wind Tre’s offering – refinancing the whole of the company’s financing and capital structure, and taking the opportunity to term out debt over six years.
The deal was made all the more impressive for being carried off in sub-investment-grade territory. The amount of energy and resources that needs to be put into investor relations in this grade and for an issuance of this size will have been considerable, the judges noted.
Jointly owned by CK Hutchison and VEON, Wind Tre was created by the merger of Wind and H3G in December 2016. It has a 36.5% market share in Italy, offering mobile, internet, OTT content and fixed-line services to consumer and corporate subscribers.
“The Wind Tre deal shows that detailed planning and execution in high-yield markets can be highly effective.”
Issuer Wind Tre
Amount £9.6bn
Structure A four-tranche secured bond, term loan and RCF
Rating (at time of deal) B+/B-/BB-
Currency and tenor €/5yr, 6yr, 7yr; $/8yr
Interest rate/coupon Av 2.7%
In a deal described by the judges as “extremely well executed”, ACT CPD-accredited employer British American Tobacco (BAT) priced a highly successful multi-tranche bond across the US dollar curve in August last year.
The $17.25bn transaction enabled BAT to repay a significant proportion of the debt facilities it put in place in January last year to pay for its acquisition of a remaining 57.8% stake in US rival Reynolds.
The tobacco company’s highly experienced treasury team took the earliest available opportunity to access the market.
As well as the $17.25bn issue, it priced a €3.1bn and a £450m deal the following day. The transaction represented the largest-ever UK corporate bond issue and, at $17.25bn, the eighth-largest debt capital markets transaction ever.
BAT is no stranger to The Treasurer’s Deals of the Year Awards. In 2015, it won in both the Bonds above £500m and Large UK Treasury Team of the Year categories.
The Treasurer's Deals of the Year Awards recognise the outstanding work of treasurers, both within the treasury community and the wider business world. Through them we champion the success and achievements of treasury teams that have stood out in the market over the prior 12 months. Winning an award is a great way to strengthen your organisation's and your treasury's profile, bringing peer and industry acknowledgement. Find out more here.