Fitch Ratings has assigned Silknet JSC's forthcoming USD300 million senior unsecured notes an expected rating of 'B(EXP)' with a Recovery Rating of 'RR4'. According to TBC Capital, the Eurobond will have a coupon rate of 8.375%, maturing in 5 years. The joint lead managers of the deal are TBC Capital, J.P. Morgan, and UBS Investment Bank.
"Coupon rate for the new notes was set at 8.375%, which represents a 676.5 bps spread over the benchmark US Treasury due December 2026.
The 8.375% initial yield and coupon rate place Silknet’s new Eurobond competitively among regional comparable Eurobonds. For comparison, Vodafone Ukraine (VODUKR ‘25) and Turk Telekom (TURKTI ‘25) trade in the range of 8.08%-9.27% as of January 19th 2021.
Unlike the refinanced Eurobond, the new issue will be eligible for inclusion in the JP Morgan Corporate Emerging Markets Bond Index (CEMBI).
The new Eurobond’s coupon rate, a 2.625 pp cut compared to the refinanced notes, has been positively affected by the 2021 Georgian benchmark bond’s unprecedented low rate. The previous Eurobond (SILNET ‘24) has been trading at premium for the past years, well below the coupon rate, with the exception of the pandemic-related hike in April 2020.
Moody’s has recently changed Silknet’s negative outlook to stable based on the improved operating performance and adequate liquidity position among other rationales,"- reads the report from TBC Capital.
