Investors Dial 2019 for Axtel

Mexican telecom Axtel has shrugged off a downgrade and taken advantage of the recent LatAm high-yield supply dearth to raise $190m by reopening its 2019. The 9% coupon NC5 bond was tapped at 102.500 to yield 8.609%. The transaction was heard open for less than an hour and driven by reverse inquiry. The bonds had been trading at 103 prior to launch – up from par when initially launched mid-September – and heard trading just below 103 after the tap. The transaction was about 2.5x subscribed, according to bankers on it. Proceeds will prepay a 2012 term loan, as well as cover $32m in nearby indebtedness, fund $30m in 2010 maturities and go to general corporate purposes, Axtel says. The telecom is rated BB/B3/B minus. The telecom raises cash just 2 days after a Moody’s downgrade from Ba2, which was caused by competitive pressure and continued negative free cashflow. Axtel originally sold $300m of the bonds September. It generated demand of over $3bn to fund a liability management exercise. The original managers, Credit Suisse and Bank of America-Merrill Lynch, ran the retap.