Investors often ask questions about Avanti’s bonds. Please see below for some frequently asked questions and the answers to them.
What bonds has Avanti issued?
Avanti issued $370m of bonds in September 2013. This was followed by further planned tranches in June 2014 ($150m) and August 2015 ($125m). A refinancing was implemented in January 2017 under which the existing bonds were bifurcated into 2021 Notes and 2023 Notes, additional funding being made available to the Company through the creation of $242 million of additional liquidity through $130 million of new cash funding and up to $112 million of potential interest deferrals up to April 2018. On 26 April 2018, Avanti completed a major restructuring that has resulted in some $557 million of its 2023 Notes converted into equity and the terms of its 2021 Notes amended (including the coupon and the term of the Notes which has been extended by one year to 2022).
Why have these bonds been issued in US$?
The US$ is Avanti’s functional currency. Due to its focus on high growth markets in Africa and the Middle East, where satellite services are paid for in dollars, Avanti receives the largest part of its revenue in US$. Avanti’s capital expenditure is also mainly paid in US$.
Why did Avanti issue bonds?
Avanti is building a satellite fleet that culminated recently in the successful launch of HYLAS 4. The issuance of bonds refinanced the Company’s existing ECA financing and enabled Avanti to finance the construction, launch and insurance of HYLAS 4.
Where are the bonds listed and traded?
Avanti’s bonds are listed on the Irish Stock Exchange.
What is the rating on the bonds?
Avanti’s bonds are not currently rated.
What is the coupon on the bonds?
The coupon on Avanti’s 2022 Notes will be 9%/9% (cash and PIK).
Where can I find the latest market price of the bonds?
US regulations stipulate that trading prices of bonds are made public. You can see these here.
When do the bonds mature?
Post restructuring, Avanti’s bonds will mature in 2022.
Further to the Successful Consent Solicitation and Exchange Offer announced 20 December 2016 (see here for more information), Avanti Communications Group plc publishes IRS Forms 8937 in respect of CUSIPs 05351LAA5 and 05351LAE7:
IRS Form 8937 – CUSIP 05351LAA5 – Consent Solicitation
IRS Form 8937 – CUSIP 05351LAE7 – Consent Solicitation
IRS Form 8937 – CUSIP 05351LAA5 – Exchange
IRS Form 8937 – CUSIP 05351LAE7 – Exchange
Further to the Successful Consent Solicitation announced 17 October 2016 (see here for more information), Avanti Communications Group plc publishes IRS Forms 8937 in respect of CUSIPs 05351LAA5 and 05351LAD9:
IRS Form 8937 – CUSIP 05351LAA5
IRS Form 8937 – CUSIP 05351LAD9
Debt for Equity
On the 26th April 2018, Avanti successfully completed the restructuring of its financial indebtedness, which was first announced on 13th December 2017. The table below outlined the proposal from when it was announced.
The holders of the 2023 Notes (“Scheme Creditors“) who submitted a validly completed Account Holder Letter, together with a valid Confirmation Form have received their pro rata share in 92.5% of the Company’s enlarged issued ordinary share capital (ISIN: GB00B1VCNQ84) (the “Exchange Shares“) following completion of the debt for equity swap under the Scheme.
The purpose of the restructuring was to substantially reduce the Company’s outstanding indebtedness, decrease its future interest expense and potentially raise new liquidity. The restructuring has resulted in interest expense savings of approximately $11m per year.
The scheme passed with 87.73% approval from the 2023 note holders and 98.09% approval from the 2021 note holders (as announced on the 8th February). The market responded well to the scheme and subsequent approval.
The 2023 notes were duly delisted from the Irish Stock Exchange on the 26th April 2018.
|Solus Alternative Asset Management||41.51%|
|Tennenbaum Capital Partners||11.63%|
|Great Elm Capital Management||9.06%|
|Rimrock Capital Management||7.14%|
|Prisma Capital Partners||3.21%|
KEY DOCS & CIRCULARS
Incorporation and main country of operation:
Avanti Communications Group Plc is incorporated and registered in England and Wales. The main country of operation is the UK. The Company’s registered number is 6133927.
Advisers & Registrars
Nominated adviser and corporate broker:
Cenkos Securities plc
6-8 Tokenhouse Yard
London, EC2R 7AS
Edison Investment Research Ltd
280 High Holborn
London, WC1V 7EE
Neville Registrars Limited
18 Laurel Lane
West Midlands, B63 3DA
Reading, RG1 1AX
Sky Light City Tower
50 Basinghall Street
London EC2V 5DE