Oskar Mobil, a Czech mobile operator formerly known as Cesky Mobil, has made its latest high-yield bond offering pari passu with its outstanding senior secured bank debt. The move is a rare one, as on the few occasions such equality has been offered, the issuer has typically had scant bank debt and a large bond burden, or needed to significantly relieve amortization pressures. But in this case, Oskar had €466 of funded bank debt and no bonds outstanding before last week's €325 million offering.
Oskar upped the seniority of the bonds to achieve higher ratings and lower funding, according to an official at J.P. Morgan, joint-lead on the offering with UBS and ABN AMRO. High-yield bonds are typically awarded a rating two notches below the corporate credit rating, but the pari passu structure allows Oskar's high-yield bonds to be given the same B1/B rating as the company. The seven-year, non-call four deal was priced last week at 7 1/2% and is expected to close in a few weeks.