Axtel Sweetens Buyback Offer

Mexico’s Axtel has increased its offer to bondholders and extended the early deadline on a tender for its outstanding 7.625% 2017 and 9.000% 2019 bonds. After hearing investor feedback, the telecom is now offering $594.61 per 1,000 principal, up from $550 – comprised of $500m in senior secured 2020 bonds, $44.61 in peso-denominated dollar-indexed 2020s and $50 cash, it says. Holders accepting before a January 18 early deadline – pushed back from January 11 – get an extra $116 per $1,000, up from the $100 originally offered. The full offer expires January 28. The new 2020 notes to be issued start at a 7.0% coupon, and step up to 8.0% after year one and 9.0% after year two. “Many bond holders who held out on the first offer are likely to accept this one, increasing participation well above the majority required,” Barclays says. The shop values the offer at $69.67, up from $53.25 assuming an exit yield for the new notes at 10%. Axtel has also included clauses allowing it to redeem the 2020 notes. There is currently $275m outstanding in the 2017s and $490m in the 2019s. Axtel has set a limit of issuing up to $357m in the dollar 2020s, up to MXP336m ($26m) in the peso 2020s, and up to $115m in cash. Axtel is rated Caa2/CCC+/B minus.