Cable names like ntl, Telewest and United GlobalCom's UPC Distribution Holdings are getting a second glimpse from the European loan market as investors grow more comfortable with the names and the industry enjoys a turnaround. Market players noted that cable names are emerging from a restructuring period with significantly more conservative leverage than when they were distressed. Many institutional investors are now expected to take a look at the cable credits as the companies wrap up restructurings and consider refinancings.
ntl is now contemplating £2.425 billion in new financing via Credit Suisse First Boston, Deutsche Bank, Goldman Sachs and Morgan Stanley that will likely take out the company's existing £2.785 billion credit. Meanwhile, Telewest is wading through the final stages of its restructuring, which will likely include the amendment and restatement of its credit facility comprising £1.84 billion of term loans, a £140 million revolving credit, a £50 million overdraft facility and uncommitted facilities of up to £125 million.
There may also be a refinancing up ahead for UPC's bank debt. Sources familiar with the credit speculate that a bond deal will take out the company's bank debt. An ntl investor relations spokeswoman did not return calls by press time. Telewest was not providing guidance for when the restructuring would be completed and a United GlobalCom spokesman declined to comment.
"There has always been somewhat of an appetite for cable names," said one trader, noting that the market is also becoming more interested in risk again. But one investor warned that it is best to take a look at the leaders of cable markets and watch out for the lower quality names. He added that leverage should not exceed three or four times for these credits.