OneTel syndication hits the web
The general syndication for the A$1.15 billion ($680 million)
financing of OneTel's GSM 1800 mobile network rollout across
Australia is to be launched imminently. The facility will finance
network infrastructure, site acquisitions and telephone hand sets
for the capital cities of all of Australia's states. OneTel sources
says Lucent will operate the network and will remain bound to
provide a technical sign-off on the network for a period of four
years after the network is completed. Completion is scheduled for
late September 2000.
Invitations for the syndication will again be sent out via the internet. The two overall co-ordinating and bookrunner banks, Chase Manhattan and Toronto Dominion Bank, previously sent out bid documents for the joint arranger roles through the internet. According to a source close to the financing, pricing is expected to be in the 70 basis points to 75 basis points range, for an A$75 million commitment.
The overall, hybrid project finance transaction falls into two tranches: a first tranche, fully guaranteed by Lucent Technologies, which is expected to gradually fall away within 18 months and a nine year non-recourse tranche slowly amortizing to zero.
Approximately 30% of the Lucent-guaranteed piece is expected to fall away when the final signing takes place. The remainder of the guaranteed tranche will fall away once the new mobile phone system reaches certain minimum subscriber and revenue targets (on a per annum basis), undisclosed debt to Ebitda thresholds and other milestones. ?We expect the Lucent guaranteed tranche to be redundant in about 18 months, by which time all the specified milestones will have been met,? says another Sydney based financier also involved in the deal.
Together with Chase and Toronto Dominion, the deal's joint lead arrangers and underwriters are KfW, OUB, Bank of America, Royal Bank of Canada, and ANZ. Credit Lyonnais also joins as arranger. The joint leads all subscribed to a A$200 million portion, Credit Lyonnais to a A$100 million portion. ?Since we've raised a larger total than we need (A$1.5 billion) we are now scaling all the underwriters back,? says the banker. Pricing on the guaranteed tranche is 50 basis points and is 275 basis points over Libor for the non recourse tranche. Gross fees paid to the lead banks are 150 basis points.
The OneTel deal represents the first time that a project finance transaction in Asia has been arranged via the internet. In this regard Asia is well behind Europe and the US. To date Intralinks, which hosted the on-line dispatches for the OneTel deal, has passed details and invitations on about $550 billion worth of financing deals in the US and Europe through its secure website.
To its supporters, internet based transactions offer the advantages of speed, efficiency and the ability to update participants at the press of a button. Details of the OneTel deal general syndication are now being sent to banks in Sydney, Singapore and London.
The successful closure of the first phase of the financing for One Tel demonstrates that there is appetite for Australian telecoms projects, despite the fact that Australia's telecoms market has a large number of competitors for its relatively small potential subscriber base. Besides OneTel's rollout, Telstra and Hutchison are establishing CDMA networks. Another mobile telecoms service provider, AAPT, also has expansion plans. ?Fundraising for OneTel or AAPT is akin to financing a merchant power station in an unregulated energy market,? says a local banker not in the deal. ?Banks are going for the OneTel deal because of the Lucent guarantee and the long term shareholder support of OneTel's major shareholders News Corp and PBL. Appetite is also testament to the fact that banks are all but full on energy sector deals following the Victorian energy assets privatization?, the banker adds.
Invitations for the syndication will again be sent out via the internet. The two overall co-ordinating and bookrunner banks, Chase Manhattan and Toronto Dominion Bank, previously sent out bid documents for the joint arranger roles through the internet. According to a source close to the financing, pricing is expected to be in the 70 basis points to 75 basis points range, for an A$75 million commitment.
The overall, hybrid project finance transaction falls into two tranches: a first tranche, fully guaranteed by Lucent Technologies, which is expected to gradually fall away within 18 months and a nine year non-recourse tranche slowly amortizing to zero.
Approximately 30% of the Lucent-guaranteed piece is expected to fall away when the final signing takes place. The remainder of the guaranteed tranche will fall away once the new mobile phone system reaches certain minimum subscriber and revenue targets (on a per annum basis), undisclosed debt to Ebitda thresholds and other milestones. ?We expect the Lucent guaranteed tranche to be redundant in about 18 months, by which time all the specified milestones will have been met,? says another Sydney based financier also involved in the deal.
Together with Chase and Toronto Dominion, the deal's joint lead arrangers and underwriters are KfW, OUB, Bank of America, Royal Bank of Canada, and ANZ. Credit Lyonnais also joins as arranger. The joint leads all subscribed to a A$200 million portion, Credit Lyonnais to a A$100 million portion. ?Since we've raised a larger total than we need (A$1.5 billion) we are now scaling all the underwriters back,? says the banker. Pricing on the guaranteed tranche is 50 basis points and is 275 basis points over Libor for the non recourse tranche. Gross fees paid to the lead banks are 150 basis points.
The OneTel deal represents the first time that a project finance transaction in Asia has been arranged via the internet. In this regard Asia is well behind Europe and the US. To date Intralinks, which hosted the on-line dispatches for the OneTel deal, has passed details and invitations on about $550 billion worth of financing deals in the US and Europe through its secure website.
To its supporters, internet based transactions offer the advantages of speed, efficiency and the ability to update participants at the press of a button. Details of the OneTel deal general syndication are now being sent to banks in Sydney, Singapore and London.
The successful closure of the first phase of the financing for One Tel demonstrates that there is appetite for Australian telecoms projects, despite the fact that Australia's telecoms market has a large number of competitors for its relatively small potential subscriber base. Besides OneTel's rollout, Telstra and Hutchison are establishing CDMA networks. Another mobile telecoms service provider, AAPT, also has expansion plans. ?Fundraising for OneTel or AAPT is akin to financing a merchant power station in an unregulated energy market,? says a local banker not in the deal. ?Banks are going for the OneTel deal because of the Lucent guarantee and the long term shareholder support of OneTel's major shareholders News Corp and PBL. Appetite is also testament to the fact that banks are all but full on energy sector deals following the Victorian energy assets privatization?, the banker adds.
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