SFR Altice France

Similar to its sister Company, Altice International, SFR Altice France launched an amend and extend last night. However, the relative cost to extend is considerably more, with interest bill likely to increase by c.€180m p.a. with the new extension. More importantly, there are more credit friendly terms proposed including asset sale proceeds, including XPfibre to be used for debt repayment and restrictions on use of unrestricted subsidiary investment basket. These added restrictions are subject to compliance with 3.5x net secured leverage ratio. Proposed maturity is expected to be August 2028, but subject to springing maturities to any debt falling due prior. The timings are short, with expected allocation by 26th January, which indicates likely success of the deal.

This deal doesn’t change our views on the name. We had highlighted the possibility of an amend and extend but it doesn’t change the underlying risks in the name on operational issues. This deal confirms the era of cheap financing is over for SFR Altice France but positively this deal brings certainty to the structure and removes any near-term maturity issues.