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The consortium which bought Telecom's Yellow Pages business said yesterday it plans a $300 million debt issue to help to pay for the acquisition.
Private equity firm CCMP and Canada's Teachers' Private Equity - the private investment arm of Ontario Teachers' Pension Plan - paid $2.24 billion for the directories business in April, beating out three other private equity bidders.
Yellow Pages Group plans to issue six-year secured subordinated notes carrying a fixed interest rate to be paid on a semi-annual basis until maturity in October 2013. The minimum interest rate would be set after a book-build process and the offer is expected to open next month.
It is intended the notes will be listed on the NZDX.
Joint lead managers for the offer will be ABN Amro, Deutsche Bank, Forsyth Barr and Goldman Sachs JBWere and it will be underwritten by ABN Amro, Barclays Capital and Deutsche Bank. Offer documents will be made available this month.
The cash raised will be used to repay part of the acquisition funding. Most of the finance for the acquisition has syndicated to 21 banks and institutions.
Analysts believe the consortium is likely to float the Yellow Pages, which is expected to earn about $280 million in the current financial year, on the stock exchange in three to four years.
The consortium indicated this year that should it do that, note holders would get a 2.5 per cent discount on the initial public offering price.
But a Yellow Pages spokeswoman said details of the note offer would be disclosed in the offer documents.
