Polkomtel lands largest leveraged loan

The 3.6 billion euro ($5.1 billion) loan, which is fully underwritten by Credit Agricole CIB, Deutsche Bank, Royal Bank of Scotland, Societe Generale and PKO Bank Poslki, comprises a 600 million zloty ($1.6 billion) six-year revolving credit facility and a 3.4 billion zloty six-year term loan a, banking sources said on Friday.

There is also a six and a half year term loan B split between 600 million zlotys and 450 million euros. The loans will be syndicated to a number of investors in Europe in the coming weeks.

In addition, there are three one-year bridge-loan facilities: a 2.95 billion zloty tranche, a 900 million euro tranche and a 352 million euro tranche. The bridge loans are used by the banks before they are refinanced into senior secured and subordinated high-yield bonds, banking sources said.

The total debt to Polkomtel's earnings before interest debt and amortisation (EBITDA) ratio is below 5 times and 3 times through the senior loans and bonds.

Solorz-Zak agreed last night to buy the mobile phone operator for 18 billion zlotys, a deal that marks Poland's biggest-ever buyout. The loan is the largest since KKR closed a 9 billion pound facility in the summer of 2008, according to Thomson Reuters data.

The deal comes amid a backdrop of uncertainty surrounding Europe's sovereign debt problems. Immediate worries over Greece's debt situation receded this week, but there have been no high-yield bond issuances for two weeks.

A number of institutional investors have started pushing back on pricing on some of the 12 leveraged loans that are currently being syndicated. Charterhouse this week increased pricing by 25 basis points (bps) on loans to back its buyout of French call-centre business Webhelp.

Polkomtel was sold by Vodafone and several Polish state-linked companies copper miner KGHM, refiner PKN, utility PGE and coal exporter Weglokoks.

Copyright Reuters, 2011