Millicom (Tigo) completes issuance of 7.375% $450 million Senior Notes due 2032
Millicom (Tigo) successfully completes the issuance of $450 million Senior Notes due 2032, aiming to repay existing debts and for general corporate purposes.
The completion of Millicom's $450 million Senior Notes issuance at a 7.375% interest rate represents a strategic move to restructure its debt portfolio. By opting to repay the $200 million DNB Loans, Millicom is likely aiming to streamline its debt obligations and potentially reduce interest expenses. The choice of a private offering limits the liquidity of these notes, which can be a double-edged sword: while it may reduce regulatory burdens and expedite the process, it also restricts the investor base to qualified institutional buyers, which might affect the pricing of the debt.
The interest rate of 7.375% is notably higher than the current average corporate bond yield, indicating that Millicom may be perceived as a higher risk investment or that it is compensating for the illiquidity of a private placement. Investors and stakeholders should monitor the company's leverage ratios and interest coverage following this issuance to assess the impact on financial health and operational flexibility.
From the perspective of debt market dynamics, Millicom's issuance of Senior Notes reflects an active approach to capital management. The decision to use the proceeds for repaying existing debt and general corporate purposes is a common strategy, but the specifics of the debt being repaid and the terms of the new issuance are key. Investors should note that the unsecured nature of the DNB Loans suggests a higher risk compared to secured debt and the new Senior Notes may carry similar risks.
The reliance on Rule 144A and Regulation S for the offering indicates a targeted approach to reach institutional investors who are capable of evaluating and bearing the risks associated with such unregistered securities. The exclusion of retail investors could be seen as a protective measure, ensuring that only those with the means to conduct thorough due diligence are participating.
Legally, the issuance of the Senior Notes by Millicom has been structured to sidestep the registration requirements of the Securities Act, which is a common practice for private placements. The use of Rule 135c for the press release is designed to prevent the communication from being deemed an offer to sell or a solicitation of an offer to buy, which would require additional legal compliance. This careful navigation of securities law minimizes the risk of regulatory complications and streamlines the issuance process.
However, the lack of registration under the Securities Act means that the Notes carry certain restrictions on resale, which could impact their marketability and, by extension, their value. It's important for potential investors to understand the legal implications of these restrictions and the potential need for an exemption from registration requirements for any future sale of the Notes.
04/02/2024 - 09:03 AM
Millicom (Tigo) completes issuance of 7.375% $450 million Senior Notes due 2032
Luxembourg, April 2, 2024 – Millicom International Cellular S.A. (“Millicom”) today completed the issuance of its 7.375% $450 million Senior Notes due 2032 (the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).
Millicom expects to use a portion of the net proceeds from the issuance of the Notes to repay in full $200 million of indebtedness outstanding under the DNB Loans (as defined below), with accrued interest. Millicom expects to use the remaining net proceeds from the issuance of the Notes for the repayment, redemption, retirement or repurchase of existing indebtedness of Millicom and its subsidiaries and for other general corporate purposes.
The DNB Loans consist of (i) a $100 million unsecured credit agreement of Millicom due 2026, with DNB Sweden AB as administrative agent and initial lender, and (ii) a $100 million unsecured credit agreement of Telemóvil El Salvador due 2026, a subsidiary of Millicom, as borrower, and Millicom, as guarantor, with DNB Sweden AB as administrative agent and initial lender.
The Notes have been offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.
Forward-looking statements
This press release contains forward-looking statements. Actual results may differ materially from those reflected in the forward-looking statements. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in our business or acquisition strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.
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For further information, please contact
Press: Investors: investors@millicom.com
About Millicom
Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America. Through our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including TIGO Money for mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business solutions such as cloud and security. As of December 31, 2023, Millicom, including its Honduras Joint Venture, employed approximately 16,500 people and provided mobile and fiber-cable services through its digital highways to more than 45 million customers, with a fiber-cable footprint over 13 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.
What is the purpose of Millicom issuing $450 million Senior Notes due 2032?
Millicom issued the Senior Notes to repay existing debts and for other general corporate purposes.
How much debt does Millicom expect to repay with the net proceeds from the issuance of the Notes?
Millicom plans to repay $200 million of indebtedness outstanding under the DNB Loans, along with accrued interest.
Who are the primary recipients of the Notes offered by Millicom?
The Notes were offered only to qualified institutional buyers under Rule 144A and non-U.S. investors pursuant to Regulation S.
Will the Notes be registered under the Securities Act of 1933?
No, the Notes will not be registered under the Securities Act or the securities laws of any other jurisdiction.
