Europe's largest high yield bond issue

The high yield bond issue launched to support last year's EUR 5.7bn buyout of Seat Pagine Gialle has been increased to EUR 1.3bn, rather than EUR 1.15bn as originally expected. The issue has been priced lower than expected, with an interest rate of 8%; however, by the time Credit Suisse First Boston had run the books on the deal, demand for the bonds had reached EUR 2.4bn. The high yield bond has a minimum denomination of EUR 50,000 and is only available to institutional investors. An unnamed source from the consortium that backed the deal - BC Partners, CVC, Permira and Investitori Associati - commented: 'The company will pay a strong dividend from the proceeds of the bond issue. The bond issue is a way of refinancing the deal in a way that creates some value for the shareholders, who can get some money back. The company will be able to sustain the refinancing because its cashflows will cover the interest payments'.

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