Telecoms towers company Phoenix Tower International navigated multiple jurisdictions, evolving financing needs and shifting investor appetite amid global economic and political uncertainty to raise the largest syndicated transaction in Latin America in 2022.
When financing talks began in December 2021, PTI initially sought to consolidate its financings into a bond issuance, but that plan pivoted to a loan following Russia’s invasion of Ukraine in February as uncertainty hit the bond markets.
Scotiabank, a lender to PTI since its first forays into the loan market, and sponsor Blackstone, crafted a loan structure that would merge PTI’s various borrowings into a single senior secured term loan, necessitating a lender pool that was comfortable with operations in 14 jurisdictions in North and South America.
Scotiabank was the sole lead arranger and bookrunner of the financing. It also acted as PTI’s sole financial adviser for the acquisition.
“Scotiabank had been a part of the PTI lender group since the beginning. They had a high degree of conviction on a bank execution … being able to tell the PTI story that when you’re looking at rising inflation rates, it is good to have a business with longer-term, escalated contracts,” said Jake Dalpiaz, a principal in the capital markets group at Blackstone.
By July, with structuring progress made and sounding out of potential lenders already underway, PTI's move to acquire a portfolio of Chilean tower assets from WOM necessitated further revisions and the addition of more debt.
Eventually, upon the credit agreement’s close in August, the best-efforts loan amounted to a US$2bn facility split between a US$1.4bn term loan, a US$540m delayed draw term loan, and a US$56m revolving credit facility.
During the financing process, the facility’s size was tripled from the original proposition of just US$610m, the leverage rate was increased and switched to a tower cashflow basis rather than Ebitda, and pricing was reduced, according to Randy Bingham, head of the media and telecoms group at Scotiabank.
“Even the people who were involved in the existing deals had to get educated on the new jurisdictions … and then there was also an acquisition being done at the same time in Chile,” said Bingham.
The loan closed with about 90% of commitments received from international lenders.
“We did a read with some of the largest accounts before we launched to make sure we had their support. When we launched, we felt comfortable that we could reach out to the rest of the market and get it done,” said Samuel Bordereau, head of global loan syndications for LatAm at Scotiabank.
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