UPDATE 4: Altice France Secured Creditor Co-Op Extension Support Reaches 94% After Final Count

Wed Oct 02, 2024 06:34 AM ET: The level of support for the extension of French telecoms company Altice France’s secured creditors’ cooperation agreement by one year to February 2026 has reached 94% of the company’s total senior secured debt and 98.5% of the existing cooperation group after the final count following Monday’s Sept. 30, deadline, sources said.

Tue Oct 01, 2024 05:21 AM ET:The level of support for the extension of French telecoms company Altice France’s secured creditors’ cooperation agreement by one year to February 2026 had reached close to 90% of the company’s total senior secured debt and around 93% of the existing cooperation group by yesterday’s, Sept. 30, deadline, sources said.

Fri Sep 27, 2024 03:46 AM ET: The level of support for the extension of French telecoms company Altice France’s secured creditors’ cooperation agreement by one year to February 2026 has climbed to 70% of the company’s total senior secured debt and around 75% of the existing cooperation group, sources said.

The entire senior secured steerco has now agreed to back the extension, with the total level of support expected to increase further by the Sept. 30 deadline, the sources noted.

Thu Sep 26, 2024 04:19 AM ET: The level of support for the extension of French telco Altice France’s secured creditors’ cooperation agreement by one year to February 2026 has reached 60%. The group’s advisors have pushed the approval deadline to Monday, Sept. 30,  from today, sources said.

The advisors have also made some changes to the agreement lenders asked for. As a result, they should be able to reach at least 70-75% support for the extension, one source added.

Majority of Altice Secured Creditors Agree to Extend Co-Op Agreement to February 2026; One Fund Holds Out; Debt Talks Continue, 2025 Secured Bonds to Be Dealt With Separately

The majority of Altice’s secured creditors have agreed to extend their cooperation agreement by one year to February 2026, sources familiar with the matter told Reorg. Sixteen out of 17 funds have given the green light to the extension, with one fund still considering the next steps, sources added.

Negotiations between the company and its creditors continue. According to sources, the company’s 2025 secured notes, which are trading in the mid-90s, will be dealt separately due to their upcoming maturities.

As reported, a group of Altice France’s secured creditors sent the French telecommunication company a debt restructuring proposal in which CLOs would get back some reinstated debt (so-called takeback debt), involving a repricing and an extension of their holdings, while the rest of the secured debtholders would take a 15% haircut.

In exchange, debtholders would receive convertible bonds exchangeable for a significant equity stake, which could lead to creditors taking control of the company from Drahi depending on the value at the time of the conversion.

The secured creditors’ counter proposal came after Altice France and its advisors floated the idea of a voluntary liability management exercise, or LME, in mid-June at about 20% discount for its secured creditors, to delever the company’s capital structure.

According to sources, secured creditors will be compensated if they end up taking a haircut. However, the economics of the deal are still under negotiations. A different treatment between CLOs and hedge funds in the secured debt is a concrete possibility, sources added.

Sources pointed out that the only way Drahi may maintain a controlling stake of the business is by either injecting new equity in it, or providing significant economic upside to creditors in a consensual process, and not in a pre insolvency regime. U.S.-style aggressive LMEs using proceeds from the sale of unrestricted subsidiaries do not work in French transactions, they added.

Altice France’s main secured bondholders include Elliott Investment Management, Anchorage Capital Group, Pimco, BlackRock and Fidelity, as reported.

More than 90% of the company’s term lenders and over 75% of secured noteholders have formed a united front and signed a cooperation agreement to negotiate with Altice and avoid creditor-on-creditor violence. The group is advised by Rothschild and Gibson Dunn.

Separately, another cooperation agreement was initiated by Milbank, Houlihan Lokey and Willkie Farr, garnering signups from just over 50% of the company’s unsecured noteholders, as reported.

The company’s creditors have been mobilizing after the French telecom business shocked the markets in March with its deleveraging plan, envisaging creditor participation in cutting its debt as it explores options to reduce net leverage to below 4x.

Altice France said in its first-quarter report that it had retained Lazard and JPMorgan as advisors to provide or arrange financing and assist in the evaluation of liability management alternatives.

Reorg’s waterfall analysis of Altice France can be found HERE.