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IPO-bound Ziggo Refinances Debt

Dutch cable operator Ziggo is refinancing its existing debt as it makes its way toward and initial public offering, Reuters reported. The company plans to extend the maturity of its 250 million euro ($360 million) debt by two-and-a-half years. Private equity owners Cinven and Warburg Pincus have hired STJ Advisors to prepare for an IPO that could value Ziggo at around 7 billion euros, Reuters reported previously.

(Reuters) – Dutch cable operator Ziggo [ZSHLOG.UL], which is being prepared for an initial public offering, said it wants to refinance existing debt and extend the maturity by two-and-a-half years.

Morgan Stanley (MS.N) and ING (ING.N)(ING.AS) have been appointed to amend the terms on existing credit facilities and arrange a new term loan F, Ziggo said in a statement on Thursday evening.

The new term loan F, which will be syndicated, will total 250 million euros ($360 million), mature in September 2017 and pay an interest margin of 375 basis points (bps) over EURIBOR, banking sources said on Friday. It will refinance Ziggo’s term loan C and second-lien loans, the company said.

The two-and-a-half-year extension will occur on Ziggo’s term loan B and C, pushing out maturity to 2017. The interest margins will increase to 325 bps and 400 bps on the B and C loan, respectively, said the banking sources.

Existing lenders have to approve the amendments by April 21, while investors need to commit to the new term loan F by April 18, the bankers added.

Ziggo said in its statement it was seeking the consent of its lenders to “make certain other amendments related to structural changes, including events that constitute a change of control and increased flexibility in respect of prepayments,” in a reference to the likely IPO.

Private equity firms Cinven and Warburg Pincus have hired STJ Advisors to prepare for an initial public offering that could value Ziggo at around 7 billion euros, three sources told Reuters last week. [ID:nLDE7301K3]

Ziggo was built up by Warburg Pincus [WP.UL], which initially invested in Multikabel in 2005, and then embarked on a classic build-up strategy with partner Cinven [CINV.UL], acquiring and incorporating other cable players.

Ziggo could also attract buyers instead of opting for an initial public offering; U.S. cable operator Liberty Global Inc (LBTYA.O) is preparing to make a bid for Ziggo, the Financial Times reported recently. [ID:nLDE731035]

Cinven and Warburg Pincus bought Ziggo, then known as Casema, in 2006 from a consortium of private equity firms including Providence and Carlyle. The leveraged buyout (LBO) was backed with 4.4 billion euros of loans. However, the loans were reduced last year after the company refinanced with a 750 million euro high-yield bond in October last year and 1.2 billion euro high-yield bonds in April last year. (Reporting by Amsterdam newsroom and Isabell Witt in London; Editing by Will Waterman) ($1=.6943 Euro)