Banks eye $6.6 billion debt for Orange, Masmovil joint venture

Bloomberg

Telecom giants Orange SA and Masmovil Ibercom SA are seeking to line up a debt package of up to 6 billion euros ($6.6 billion) to back a joint venture, creating one of the largest leveraged debt financings in the region, people familiar with the matter said.
Orange and Masmovil entered into exclusive negotiations on March 8 to combine their businesses and consolidate the Spanish telecom market, in a deal that would give the combined company an enterprise value of 19.6 billion euros, according to a press release.
The joint venture will require a debt financing, and to date there is none in place, the people said, who asked not to be identified because the matter is private.
Raising so much debt in the public markets at the moment, given the volatility caused by Russia’s invasion of Ukraine, will put to the test banks’ underwriting appetite. At present, banks are sitting on around $65 billion of existing underwrites they still need to sell down. Private credit could try to participate in some form, given its recent track record of dealmaking even in the current climate.
The expectation is that Masmovil and its shareholders will hold talks with banks over the next 8 weeks and look to put together a bank group and debt commitments. However there is a long window for the debt to be issued before the deal funds, the people said.
A Masmovil spokesperson declined to comment on the financing. An Orange representative said, “At this stage of the exclusive negotiations, there are no financing needs that need to be addressed by Orange.