Negotiations between Altice France and its creditors are “a positive thing” that could put the telecoms business back on a stable footing, according to CreditSights, following news reports that the group has received a counter-proposal.
According to a Bloomberg news report, potentially up to €8.2bn of CLOs, one third of the debt stack and 40% of the secured group, would take back debt with a repricing and maturity extension. The remaining, at least €12.1bn, of secured creditors would take a 15% haircut.
Analysts Mark Chapman and Alex Lawrence said the fact that negotiations are starting to take shape is a positive development for secured creditors.
“Pragmatism” from secured creditors in terms of maturity extension and repricing for loans held in CLOs, as well as a modest haircut for SSNs, “suggest there is room for a deal that could put Altice France back on stable footing with leverage at or below ~4.5x”, they said.
Although they expect that it is “highly likely” Altice will reject the deal in its current form, there is “enough theoretical common ground here to bring both parties to the table”.
The analysts think Altice shareholder Patrick Drahi could accept a deal involving “a modestly sized convert, which he would expect to redeem in cash as SFRFP [Altice France] steadily recovers”, as long as creditors at least match his contribution to debt reduction, including the proceeds from asset sales.
Agreeing a deal still looks contingent on forcing “a very substantial haircut” on the Altice France Holding SA unsecured bonds, they said.
CreditSights retains its Buy recommendation on the Altice France 2029 secured notes marked in the low 70s, and a Sell recommendation on the unsecured notes, marked in the high 20s and 30s.
See the full report here: Altice France – Sec’ds Bring Drahi a Counter-Offer
Sandrine Bradley
sandrine.bradley@levfininsights.com
+44 (0)20 3530 1878
