Italian directories publisher Seat joins the long list of corporate bond issuers

David Hellier
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ITALIAN yellow-pages publisher Seat Pagine Gialle yesterday revealed that it will be issuing a €650m (£573m) bond to help it refinance its debts.

The group, which publishes ThomsonLocal in the UK, issued a prospectus following a refinancing deal reached last week with its senior creditor banks in an agreement managed by the Royal Bank Of Scotland.

The European high-yield bond market has experienced an unprecedented level of issuance lately as companies take advantage of investor demand for higher-yielding assets.

Companies such as Virgin Media, Manchester United and Heidelberg have recently taken advantage of the appetite in the market for high-yielding corporate bonds.

Seat will be meeting potential investors in London today and tomorrow, with advisers set to propose a price towards the end of the week.

Analysts said they expected a coupon of around 10 per cent for the securities, which are known as senior secured bonds.

Seat’s high debt has limited the company’s ability to restructure in the economic downturn, as it shifts its focus onto its online business, away from the declining print directories market.

Seat warned in its prospectus that its high level of indebtedness would continue for the near future and that its ability to refinance at reasonable terms might be beyond it.
Royal Bank of Scotland (RBS) has been one of the key advisers to Seat, both in terms of its straight lending to the group and now as part of the group of advisers helping support the bond issue.

The bank, whose global head of high yield is Eric Capp, has had a massive team working on the deal. This includes originators, who put bond issues together; syndicate specialists, who price a new bond; coverage officers, who deal with a company throughout the year, analysts who cover the sector and sales people.

RBS also led talks last week that resulted in Seat’s existing lenders granting permission for the bond issue to take place, with two people dedicated to managing that process ahead of the issue being able to go ahead.

RBS has been involved in advising on many of this year’s issues, including Virgin Media, Repsol, UPC and Heidelberg Cement. Christian Knitzschke, director in the high yield syndicate team, says that part of the bank’s success in this market is its international connectivity.

Other banks working on the deal include JP Morgan, Citi, Deutsche Bank and BNP Paribas.

RBS hired Capp from JP Morgan, where he was head of high-yield capital markets, in 2007.