As at December 31, 2014, the details of the loans from financial institutions and bonds are given in the sections that follow.
The maturities of borrowings are given below:
December 31,
2014 < 1 year
One year or more
December 31, 2013 (In millions €)
Bonds ... 15,807.2 26.7 15,780.5 2,554.0
Loans from financial
institutions ... 4,814.8 139.9 4,674.9 1,213.4
Total ... 20,622.0 166.6 20,455.4 3,767.4
ALTICE S.A.
Notes to the consolidated financial statements
112 15.2 Bonds
Compared to the year ended December 31, 2013, the Company and NSFR issued new fixed interest instruments to finance the acquisition of SFR. The proceeds from the issuance of such debt were used by the Company to purchase its pro-rata share of ordinary shares with preferential subscription rights issued by Numericable in connection with the acquisition of SFR in November 2014.
Instrument Issuer
ALTICE S.A.
Notes to the consolidated financial statements
113
All instruments listed above are level 1 financial instruments.
Depending on its type, each instrument has a different credit rating. All Senior Secured Notes issued by the Numericable-SFR group are rated Ba3/B+. Senior Secured Notes at Altice Financing are rated B1/BB-, while the Senior Notes issued by Altice Finco are rated B3/B-. The Senior Notes issued by the Company are rated B3/B.
The Senior Notes and Senior Secured Notes are listed on the Official List of the Luxembourg Stock Exchange and traded on the Euro MTF Market of the Luxembourg Stock Exchange.
In accordance with the Group financing strategy, other than the following debt that has been issued locally by HOT, all of the bonds described above have been issued either by Altice S.A., Altice Financing S.A., Altice Finco S.A. or by Numericable-SFR S.A.:
HOT’s Series A’ debentures-€167 million, linked to the Consumer Prices Index for Tel Aviv. Series A’ debentures which are repayable in 13 semi-annual payments commencing on September 30, 2012 and up to September 30, 2018. They bear yearly interest at a fixed rate of 3.9%.
HOT’s Series B’ debentures-€137 million which bear yearly interest at a fixed rate of 6.9%. Series B’ debentures are repayable in 13 semi-annual payments commencing on September 30, 2012 and up to September 30, 2018.
Except for the amortising bond issued by HOT, no other bonds have any current portions.
15.3 Covenants
The debt issued by the Company and its subsidiaries is subject to certain restrictive covenants, which apply (i) in the case of debt issued by the Company, to the Company and its restricted subsidiaries, (ii) in the case of debt issued by Altice Financing S.A. and Altice Finco S.A., to Altice International S.à r.l. and its restricted subsidiaries and (iii) in the case of debt issued by Numericable-SFR S.A., to Numericable-SFR S.A. and its restricted subsidiaries.
Other than the HOT Debentures and the revolving credit facilities described below, such debt issued by the Company and its subsidiaries is subject to incurrence based covenants, which do not require ongoing compliance with financial ratios, but place certain limitations on the relevant restricted group’s ability to, among other things, incur or guarantee additional debt (including to finance new acquisitions), create liens, pay dividends and other distributions to shareholders or prepay subordinated indebtedness, make investments, sell assets, engage in affiliate transactions or engage in mergers or consolidations. These covenants are subject to a number of important exceptions and qualifications.
In order to be able to incur additional debt under an applicable debt instrument, the relevant restricted group must either meet the ratio test described below (on a pro forma basis for any contemplated transaction giving rise to the debt incurrence) or have available capacity under the general debt basket described below or meet certain other exceptions to the limitation on indebtedness covenant in such debt instrument.
Debt
ALTICE S.A.
Notes to the consolidated financial statements
114
ALTICE S.A.
Notes to the consolidated financial statements
115
* Debt issued post December 31, 2014
** Tested on a gross debt basis
The Company or its relevant subsidiaries are allowed to fully consolidate the EBITDA from any subsidiaries in which they have a controlling interest and that are contained in the restricted group as defined in the relevant debt instruments. If the ratio test is exceeded and there is no additional capacity to incur debt under general debt basket, subject to certain additional exceptions to the limitation on debt covenant contained in the debt instruments, the relevant restricted group cannot incur any additional debt until the ratio test can be complied with.
The Company and its subsidiaries also have access to the following revolving credit facilities and guarantee facility which provides additional liquidity to the Group. The terms of these facilities include certain incurrence based covenants that are no more restrictive than the incurrence covenants contained in our other debt instruments. In addition, these facilities also include financial covenants at the levels described below.
Facility
Applicable Restricted
Group Financial Covenant Testing
Senior RCF USD 80M and Pari Passu Guarantee Facility EUR
ALTICE S.A.
Notes to the consolidated financial statements
116
As of December 31, 2014, the Group was in compliance of all covenants listed above.
Unsecured debentures issued by HOT and listed on the Tel Aviv Stock Exchange include the following financial covenants measured on HOT’s performance, which mainly include:
A debt to EBITDA ratio, which is not to exceed 6 for a period that exceeds two consecutive quarters;
No distribution of a dividend when HOT exceeds a debt to EBITDA ratio of 5.5.
As of December 31, 2014, HOT was in compliance with all of the required financial covenants.